All depends on the quality of the scalers involved! Any highly rated flatscreen will have a decent scaler - typically one that will outperform those in budget upscaling players (think sub-£100 DVD players or sub-£300 home cinema systems).
Move either up the player ladder (Denon DVD1940; Sony PS3; Marantz DV7001 and up) or down the flatscreeen ladder (older or poorer sets) and you may find the player has the upper-hand on scaling - as well as being a better source all-round, obviously.