To encode as HD or view as HD?
To upscale a file to HD, FFDshow has a built in resizer. Also, many players can do this.
To encode as HD, heres how I do it: (I use MeGUI)
When creating the AviSynth script, you want to use a Square pixel resize.
For example, a widescreen DVD is a anamorpic 720x480 resolution.
So, make it 720x400 so its 16:9 Square.
I also do not crop black bars if present.
For the resizer choose one that does well with upscaling.
Lanczos4 (4tap) is good, or Spline64 Sharp (10tap)
Spline64 is slower, but yields slightly better results IMHO.
Once you have everything setup in your script, De-Interlacing etc, go to your Script TAB and change to resolution manually to 1280x720 or 1920x1080.
If using FFDSHOW, you can make some changes there as well to help a bit.
Picture Properties : Luminance Fix+Full range
Sharpen- UnsharpMask (but use lower levels like 6-10. You want subtle shapening, not a lot.
Then, encode the video with x264. probably want at least a 4600-5000 bitrate for 720p, VS 1500-2000 at DVD.
The result will indeed be a better looking image than recoding at DVD resolutions.
But it will not be that much better.
And it will not be no where near as good as a true BluRay.
If your after the absolute best quality you can get, it may be worth it.
If space is a concern, then certainly not.
The increase you do gain from the upscale does not always justify the file being nearly twice the size, so it really depends on whether it is worth it to you.
Also, for this to work right, you must have an original source. Upscaling a already lossy file will not yield good results.