Yes, you will. The difference between Standard definition TV and High definition TV is big, you'll notice the difference even on a small screen like 20".
480i/p vs 720p/1080i: Very noticable difference. If I can tell the difference between a 640 by 480 resolution video and a 1280 by 720 resolution video on my 17" computer monitor, you'll surely notice it on a 32".
720p vs 1080p: Much smaller difference. You'll hardly notice the difference between 720p and 1080p.
EDIT: Sorry, I thought you were asking if the difference between an SDTV and an HDTV was big, even on a small screen. The actual answer to your question: Yes you will. An upscaled image is one thing, a native HD image is another. While an upscaled DVD certainly does look better than a non-upscaled DVD, Blu-ray is still much better. Upscaled images are simply SDTV quality, but the edges are sharper. It doesn't actually include the detail of things (the detail of a face), it just enhances the edges and does some other minor things. Blu-ray FTW.
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