Hi GTH,
To answer your first question - if you want things to just work then buy a blu-ray player. (You will understand what I mean by this later) I am the owner of a Sony Playstation and the advantage in having it is that updates to the Blu-ray standard have come and will come thick and fast. The playstation seems to have a fairly easy and painless way of updating (the others you mention I am not sure if they do updates at all).
That said the playstation does not do Hardware updates - so things like HDMI which is that great cable that carries sound and picture cannot be updated. This would mean a cheap player would be better so that you could get rid of it for a new one if you needed the hardware benefits as well.
I however recently built my own media station computer HTPC in micro ATX form factor - and managed to fit a laptop sized blu-ray player in it. This certainly gives you a lot of flexability but also causes the most nightmares.
With so many different video and audio standards out there (file types, codecs, software), building your own HTPC and getting it to work properly is not easy. For example it is only at the beginning of this year that a reasonably priced HTPC for consumers went on sale that would give you HD Sound and HD Picture. But when it does Windows 7 and media cetre with a large projector and 7 speakers will mean you think twice about going to the movies - especially when you can hit pause to go to the toilet. The wife factor is also very very high.
As for upscaling - well every device from the moment the data is decoded to the time it is thrown on the screen can or is going to play a role in that. You are going to get many many different opinions on which does it best. I must admit that whilst I am a home cinema freak i do not get into it that much that I can say which device upscales better. Also to get into that kind of dicussion you would have to understand which devices do upscaling and which will pass the information untouched through.
If you want a non-technical answer and or my opinion, let your display device do the upscaling as it will upscale it with its own display capabilities in mind. A rather stupid or over simplified example would be a player that upscales to 1080p but you only have a Display device that outputs 720p.
As I now use a HTPC for all content - I use a software solution called FFDSHOW - or I let my projector do the work. The benefit in FFDSHOW is that you can set up the upscaling yourself.
The AVS Forum is a great start to getting more information about these kinds of things. You will find me there too.
And if you do go the way of HTPC Media Browser really makes things look professional eg.
http://www.google.com/images?hl=en&...=UTF-8&source=og&sa=N&tab=wi&biw=1280&bih=832
