DSP is a very broad term for devices that can do a lot of different functions ranging from simple EQ to time alignment, etc. That is why everyone needs to know what custom options he's looking to use the DSP for, so that they can accordingly suggest a unit that meets the required features.
Quite a few head-units have enough processing in them to negate the need for a separate DSP unit altogether.
Edit: And yeah, a DSP cannot 'improve' sound quality.. running the signal through another unit degrades the sound quality a notch.