Upscaling will help a little, but the problem is that the source material is still 480i, and isn't in some scalable format. So all it's really going to do, is blow up the image to 720p or 1080i/p.
It might smooth out a few edges here and there, but don't expect any dramatic improvements in quality.
Hello. I was reading this article http://www.pro-g.co.uk/news/23-05-2007-5553.html. When I put in GTA:San Andreas in my ps3(using HDMI) the picture was kind of grainy and funny looking. Will the update this article is referring to fix this. Or is the ps3 already capable of upscaling to 720p and I haven't realized it yet. This is my tv http://www.newegg.com/product/product.asp?item=N82E16889102046. Thank you.

Chowhound
Comic Vine
GameFAQs
GameSpot
Giant Bomb
TechRepublic