Your TV maybe HDCP compliant but the signal is not. Does your DVD player a hdcp compliant? Try playing it at 480p. If you can't play it at higher than 480p then you are trying to run a signal that is not HDCP certified. Means you need a player like blu-ray or HD-DVD and HD Disc to be able to use 720 and up resolutions. That sound funny to me since both uses Blu-Ray light and are High Definition DVD execpt for size of light.
Check some other sites for info on hdcp compliants.
http/en.wikipedia.org/wiki/HDCP
" HD DVD, Blu-ray Disc and DVD players (with HDMI or DVI connectors) use HDCP to establish an encrypted digital connection. If the display device---4or in the case of using a PC to decrypt and play back HD-DVD or Blu-ray media, the graphics card (hardware, drivers and playback software)---does not support HDCP, then a connection cannot be established. As a result, a black picture and/or error message will likely be displayed instead of the video content. "
To my understading base on HDCP terms. In your case of upscaling DVD signal that does not have HDCP encryption, signal is limited to 480p.