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I dunno whats really going on in this thread, I don't really have the time or care to crawl over every post, but i felt the need to point out, in case someone hadn't already
In my humble opinion, upscaling provides no increase in quality.
The differences come in when you watch the broadcast content content at a higher resolution. In which case quality will differ depending on the device doing the actual upscaling. Most likely the television network upscaling equipment is faster and of higher quality than in the average HDTV.
(protip: this paragraph is mostly filler) So why do they downscale the content before rebroadcasting it? I would like to think that this is miscommunication. Usually companies like this don't do something without a reason. So, if true, it could be the result of inaction rather than poor actions. This could simply be that they're gearing up to 720p but don't have all the steps in place. Then why upscale back? Depending on how the system works to get the content from the air to their television, it may be more efficient to use that bandwidth (not talking about internet bandwidth) and then be able to market on the point that they broadcast in 720p. Many early-tech HDTVs don't upscale either. This could be speculated on forever, so I'm leaving it incomplete at that.
The question here should be, should fan subs use the 720p content or the 480p content? The answer should be obvious. Even if it is higher quality 480p, since it was produced at 720p, it is still only 480p now. So then it is only a matter of trying to retain as much quality as you can in your encodes (as usual). And if I recall correctly, you can get more quality per bit at the lower resolution. Computers don't need pre-upscaled content, so why upscale in advance like a television network.
Unrelated:
Hardware encoders are usually going to be better quality than software encoders.
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