Spend some time at AVSForum and you can educate yourself on all of this and more in whatever price range suits you. Lots of good people that are very helpful if you do a little searching first. http://www.avsforum.com/avs-vb/index.php?
I watch DVDs two ways: While on the treadmill I watch a HD TV set fed from a stand-alone DVD player. The resolution is perfectly adequate as the picture is sharp and clear, I'd say somewhere between a normal TV signal and an HD TV signal. (In Fargo I had digital cable. Here in Spokane I have no TV input at all.) I have no need of a higher-resolution DVD for the teadmill/TV. I also watch movies via a projector connected to my computer. Because the image size is so large, resolution is an issue. I'd buy a new player and projector in order to get better quality images from the projector. I think NetFlix said it would support one of the new formats, though it might be some time before anything I want to watch would be available in the new format. I won't buy new equipment just to watch bad movies more clearly. I'll only buy it if movies I actually want to watch are available.