Does Sony RDR-HXD860 upscale SD image if viewed through it?

I've recently Bought a Sony KDL-40W2000 LCD TV and Sony RDR-HXD860, and I'm an existing Sky customer (SkyHD being installed this Friday).

I know playback of DVD's using a HDMI cable supposedly 'upscales' to 1080i, but I'm sure Standard Definition broadcasts are also upscaled when viewed through the RDR-HXD860, and when playing back saved SD programmes on the HDD. Any techies out there able to confirm this, or is my untrained eye deceiving me? I swear it's a better picture, both in colour and clarity, than viewing through the SCART leads between Sky box and TV.