Lets take your DVD for example. Assuming there's also a BRD available of that movie. If you upscale that DVD source it will never look as good as source material from a BRD at 720p or 1080p. Granted if you sit far enough away from the TV any differences might not be perceivable but they are there. 480p = 480p upscale < 720p = 720p upscale < 1080p.
I've not argued otherwise, the point is in the very thread I linked to, it is seen that even doing 1080->480->1080, and even zooming in on the image, we observe two things:
First there's plenty of fine detail in the image upscaled from 480p
Second in some scenes it is difficult to tell the difference between upscaled 480p and native 1080p(depends on content in the scene)
In fact the whole linked-thread is to see if the masters used were originally HD masters or not, as it is difficult to tell even that.
That addressed I've already said that 480p might not be the optimal resolution given aspect ratio issues, higher resolutions may be used maybe sub720p or maybe even 720p depending on available resources.
The point is getting perfect image quality. Even the ps2 was able to provide excellent iq in short order through the photomode of gran turismo 4. The gran turismo 5 has an even better photomode.
This is the kind of thing I'm talking about
ps2 photo mode gt4
gt4 photo mode
or even better the new gt5 photo mode
gt5 photo mode
A 480p source upscale will never look better than the original 480p source. Upscalers aren't magic and can only attempt to faithfully reproduce the details available in a 480p source.
I don't expect the upscaler to do magic and add fine detail where it is lost, that said the image can be quite sharp and some areas of the image may very well be virtually indistinguishable from native of a higher res(depends on content). You only have to look at the comparisons, especially on the newer quadhd, where given the additional data of an initial 1080p image the upscaled image will be both extremely sharp and look stupendous(the upscaled quadhd can actually look better than native 1080p). I've seen cases where an upscaled image can actually look substantially better than the original non-upscaled image, being sharper and less blurry....
In fact that's
one of the things people complain about when comparing dvds to blu-rays, the upscaled image can look better than the native dvd at times substantially so 
That's why they often say it is better to compare bluray images to native dvd, not upscaled dvd as the latter can look better and diminishes the magnitude of the difference when comparing.
That said the whole point is whether the downside of lost fine detail is enough to balance the upside of elimination of pretty much all IQ artifacts.
If I can take a 720p image supersample it heavily and I get perfect Image quality, would it be better to do that or to use a higher resolution with artifacts all over and one complaining constantly?
steampowered rather than asking, why not run a game at 1080 with 4xssaa benchmark it take a screenshot
run the game at 640x480 with 4xssaa make sure its running fullscreen on your 1080 monitor
That's not the point, the point is that for the resources that you use to 4xssaa a 1080p image you can apply higher levels of SSAA to the 480p or preferably other resolution that preserves aspect ratio.
Say those same resources 4xSSAA 1080p can achieve such a high level of SSAA at a lower resolution that the image quality becomes perfect. All of a sudden this changes thing, because you have CG-like image quality, and if the resolution is say 720p or slightly lower the level of detail will be indistinguishable from the native 1080p for pretty much anyone even zoomed in when it comes to most content. As I mentioned the content that might be most noticeable for humans(small text), can be kept at native resolution and merged with the final image(for example HUD elements.).
