We have a DVD player that upconverts, and regular DVDs do look better than with our old DVD player on the same TV (Samsung LN46A550). So I don't think our TV upconverts on its own, and standard TV does look shitty.
But I've never heard of a TV that upconverts, only DVD players, so maybe it's rare or maybe it's all of a sudden standard. At this point I've gotten used to the shitty standard TV look and we rarely watch non-HD channels anyway.