1. Playing your old DVDs on a BR player "should" look better, because the image is being upconverted in the DVD player. But, this depends on the quality of the upconverting in the BR player vs. your TV, because you can simply choose to let your TV do the conversion.
2) Should you replace standard-def titles with BR discs of the same title? I pondered the same question. After buying a few select BR discs of titles I already had, I can, without any doubt, say that BR titles DO look better. I own about 15 or so BR discs (Sunshine, Terminator 1 & 2, Fifth Element, Battle of Britain, Casino Royale, Cars, are just some) and I own SD of the same, and when I have done an A-B comparison (playing both discs on a PS3 set to 1080p/24 feeding my 1080p Sony), the image on the BR disc is just so much better, I feel like I can reach right into the TV and touch the actors. It's really stunning! Now, I can't compare how this would be if your TV is a 720p or 1080i, but I'm assuming the result would be the same. So, after this comparison I asked myself: Should I replace all of my titles with BR discs? The answer was "NO". I still buy standard-def DVDs. I am only replacing some specific titles or buying new BR discs when I feel the movie will justify it. Big action, movies with big visuals (like How the West Was Won) or Sci-Fi titles that have the cinematic scope to justify BR discs will make me buy in BR format. If the movie doesn't justify the BR format I still buy in SD. Of course, one of the biggest dilemmas for me is what to do when I go on vacation and I want to take some titles to watch on my computer or portable DVD player, which aren't BR compatible? I still need SD discs for this.