Yes there are differences. There are different levels of quality in how they are built, power supplies, d/a converters, codecs, wiring, processing, etc. I remember when the LG dual format player came out, it looked better in interlaced than it did running in 1080P because the player didn't have good video processing. The ps3 has really pretty good picture quality, the audio is alright. When you compare it to a higher end player like a Denon the Denon is quite a bit better in video and audio quality. Besides the Denon and maybe one or 2 others there are not many high end players on the market. These will be a lot more expensive when they come out but there will be differences that you will notice. Right now there are quite a few in the 300 to 600 dollar price range that are decent. Think of it this way - your CD or DVD player is like an orchestra and your disc is like a piece of music. If you play your disc on a 20 dollar player from Walmart it's like giving the piece of music to a junior high orchestra and having them perform the piece. If you play your disc on a nice Denon, Pioneer Elite, or even Meridian it will be like giving your piece of music to the London Symphony Orchestra. Even though they are the same piece of music they will be interpreted differently and the outcome will be noticeable. Some things that will be different in the audio would be dynamics, bass, resolution and detail etc. Some differences in video would be color accuracy, black level, motion, detail, noise, shadow detail, dynamic range, etc.
Is there any noticeable difference in picture quality between the two? I ask because I did notice a slight difference between using my PS2 (one of the later progressive-scan models, for whatever it's worth) and my regular Onkyo player.