upscaling anything from SD to full HD wont make it look great infact you will be adding unwanted artifacts..
normal SD video is 480p and dvd can be 580p .. your tv is HD ready .. why would you want to upscale to full HD.
good avr's have better upscaling chips but that's the deal they are expensive... you can pick any media player and let the tv do the rest of upscaling.
panasonic is known for better picture quality in SD content and diffrence won't be much as it will upscale from 580p - 720p.
dont expect anything amazing from any media players.. besides bdp's like oppo but they are like north of 20k budget.
rest there are many in your budget.
look for wd live.
asus o play
hi-media
kaiober.
you can get an xtreamer for 100$ from us.. that will be like 5k