The post you quoted above already answered your question. And yes technically, 1080i (1920 x 1080interlaced) has very big difference with 480p (640 x 480progressive).
I'm currently using a Samsung DVD player thats upscale upto 1080i connected to my LCD screen, and to be honest I can barely see the difference, but using my boss' Toshiba HD DVD, you can easily tell the difference.
Since your display LCD supports 1080p, then I suggest that you get a stand-alone DVD player that supports video upscaling upto 1080p. Ensure that the upscaler is good (based from other discussion, the oppo seems promising). So invest as well with good upscaling dvd player. Remember that no two Dvd upscaler are alike.
If you want to see the difference of 480p, 720p, 1080i and 1080p, go to SM appliance store in Mall of Asia. Go to the Pioneer section where there is a Pioneer BD player connected to their flagship Pioneer Plasma HDTV, ask the store personnel to insert a regular DVD and toggle the switch of different screen resolution in the BD player.
With PC, the main factors that affects the video quality are the video card and the software player.