I'll leave it to others to describe the technical details of upsampling, but, the unit you describe can be set in 44.1 mode with hdcd (if an hdcd disc) or in upsampling mode. You can upsample any cd, but if you upsample an hdcd disc, you will bypass the hdcd decode circuit (to my ears, it harshens the sound a wee bit). I have found upsampling to be fairly subtle, but can be more audible on some discs than others.