I took the 480p challenge and got the wife to offer her opinion also. Set to 480p, our E* SD input from an 811 via DVI to a Sammy HLN507W DLP (720p native w/ internal scaling) produced no improvement in PQ and argueably reduced the PQ.
For almost all DTV viewing I leave the 811 set on 1080i except for HDTV transmitted in 720p (ESPNHD/ABC), for which I switch to 720p, and for EDTV (Fox 16:9 broadcasts) transmitted in 480p, for which I set the 811 to 480p. For HDTV and EDTV broadcasts I match the 811 setting to the souce setting and let my Sammy's scaler do the hard scaling. My HDTV PQ is better than anything I've seen on a store demo and, yes, I wish switching was 1 or 2 clicks instead of 8!
I initially had an S-Video connection from the 811 to the Sammy as an alternate for SD, but the SD PQ, besides the darkness issue was not as sharp as SD via DVI. It was; however, sharper than the SD via S-Video from the 2700 which my 811 replaced.
I think a lot of the PQ versus 811 input setting versus 811 to TV cable issues are driven by the DTV the picture is being produced on. Some have very good internal scalers, some don't. Some don't do a good job with SD, some do. The 811 isn't perfect, but it does a more than adequate job as far as PQ is concerned (excluding the darkness issues, which should be fixed by software upgrades).