With a good SD tv, Component cables at regular 480i, Blu-ray can make a difference. Sure, the resolution won't be any different than playing a DVD, but many forget the encoding on Blu-ray has much better bandwidth, so they often handle details in dark scenes better, crisp clear shots in fast motion with no macro blocking, no edge ringing around type or compression artifacts. You regain details at SD resolution that the DVDs lost due to it's compression.
Simply put, think of it as this, DVD is a low quality jpeg, while Blu-ray is a high quality jpeg. You still get benefits even at DVD resolution on the blu-ray side.
But again, all depends on the tv picture quality and cables used. Someone mentioned Happy Feet. I tested both sides (combo disc) and the dvd side had horribly compression in a lot of sceens with the mass amount of penquins. Looked like a bad quality download. I don't have any more SD tvs but at least I know if I played the HD side downscaled to 480i there's no such thing as compression or macroblocking in the picture.
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