The latest firmware is supposed to allow upscaling to 1080p.
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You may want to do a search over at the AVS forums, where theres a ton of info on the P3 in the blu-ray player forum. From what I've read, I understand the P3 to be an exceptional blu-ray player, but a very average SD def player. But since you've got the Toshiba, do you really need the P3 to be good on SD as well?
The best resource for Standard def DVD performance is hometheaterhifi
They have objective benchmarks of nearly every player.
The ps3 does not rate too well for SD DVD.
Here is the review: http://www.hometheaterhifi.com/cgi-bin/shootout.cgi?function=search&articles=133#SonyPlayStation%203%20(HDMI)
Probably your best bet - would be to get a PS3 for Blu-Ray and Games, and get an Oppo for your standard DVDs.
The best bet is to buy an upscaling Toshiba XA2. Its an HD-DVD player, but even if you are an anti-HD-DVD person, the upscaling capabilities of this particular player are a little better than the Oppo offerings. There is also an ethernet connection for software updates over the web is quite an advantage.