All that upscaling does is stretch the image to the resolution that you desire. If you buy a DVD player that upscales DVDs to 1080p, the DVD will be stretched from it's native resolution to 1080p. If your TV's native resolution is 1080p, the DVD will look better when it is being displayed at the upscaled 1080p resolution because a TV will always look its best at its native resolution. Depending on how well your TV handles upscaling, you may or may not see an improvement by getting an upscaling player. Odds are you will because most TVs are meant to be displayed at their native resolutions and don't do upscaling all that well.
So, basically, when you use an upscaling DVD player, it's just stretching the DVD to your TV's native resolution so it will look the best that it can on your TV. If you were to set the DVD player to play at 480p, it would look like crap (depending on how well your TV does upscaling) because it's not being displayed at your TV's native resolution. Upscaling does not improve the actual quality of the DVD in any way.
That being said, pretty much all upscaling DVD players work the same way. Find one with an HDMI output that will upconvert DVDs to 720p at the best price point you can. Make sure that you look for one that allows you to upconvert to 720p also and not just 1080p since the native resolution of your projector is 720p and throwing 1080p at it would either not work or force it to downscale the image, making it look worse than it would if it was just being given its native resolution of 720p.
Honesty, if all you want to do is play DVDs at 720p, spending more than $75-100 would be a total waste.
:EDIT: Just found a good article on cnet explaining the whole thing.
http://reviews.cnet.com/4520-6449_7-6859904-1.html