Yes, but if your source is DV, it won't upsample to look as good as if your source were HD to start with. You can upsample anything. The question is how good will it look. Vegas does an outstanding job of upsample. There are hardware tools that do a better job, such as the S&W box,es, but to my eye, they're not *that* much better than Vegas is, especially with what Vegas 6 can do. A lot of the quality is also source dependent.
Perhaps BJ_M or Farss (or someone else) will have some additional suggestions, but if you can get the source in a format that's higher quality/less compression than DV, you'll be much more pleased.
You could try to fake HD in capture - I have only toyed with it a few times. But you have to sort of take some things into account - first is you can't do it in Vegas. So I could just stop with that but you can do it in Premiere if you have the MC HD plug-in. Or you can try it in the stand alone MC Mpeg encoder. Also if you take standard 4:3 ratio footage it doesn't work all that well because the aspect ratio doesn't match. However if you have shot 16:9 material you can just capture away - sort of capturing HD in real time, except it isn't true HD but you end up with an HD file and don't have to render to the format.
How does it compare to just croping 4:3 material and rendering out in Vegas 6? I have not gone that far with any sort of comparison, I don't have Vegas 6. But I did various tests with PPro 1.5.1 and captured to the CineForm codec - but that only will capture "native" so it just takes the incoming 720x480 and that is that. You still need to up rez to HD. Using the MC MPG capture (Direct to MPG) however, it works great and you end up with the correct ratio - well, provided you start of with the 16:9 footage. It might be an unfair test but someone could shoot side by side with something like the XL2 in 16:9 mode and use the Sony HDV cam at the same time, with the same settings, and than capture the DV via the main concept HD/MPG codec and compare the two.
upsample your dv files by using a stepping method of size increase - increasing resolution no more max. 20% at a time ... using mitchell or lanczos type filters (or some of the photoshop plug ins like Extensis SmartScale which work really well) ... programs like AE (w/ plug-ins) , Fusion, Shake, virtualdub, avisynth and others are often used..
save to uncompressed or lossless format ... (or frame serve) ..
use a proxy for final editing and then swap out for final files ..
you will need to add (from dv source) some dithering most likely , increased saturation and contrast , a combination of both some blurring techniques and some sharping ... much of the above has been predevoloped in some of the wonderful film tools available for vegas .. but look at scene by scene (but keep scenes matched non the less) and overall look by hand will make for the best quality . ... ive blown up DV footage - even green screen .. to huge screens using 70mm film and/or digital projection .. not my first choice as im not a huge fan of DV , but can be done and look pretty decent -- or at least acceptable (my opinion creeping in there) .. most audiences dont seem to care really is the sad truth on image quality ..
there are several major films out which were shot on DV
check out the following link for DV films and which camera used
Bitjazz is a great codec set. They've come a long, long ways in the past few years. It's great that they're PC based as well as Apple now too. Play with their newest, you'll be impressed, I think
BitJazz (sheervideo) is a good compression scheme , though i'm not sure of HD support for PC yet (they do for mac though) , it is very similar to huffyuv running in rgb mode which is also lossless, same 2:1 compression ratio apx., and is extremely fast (real time compression or better). They both use i believe huffman LZW compression .
Both support alpha channel.
Huffyuv though is free. It is not multithreaded though (neither is sheervideo on PC)
Does the Synchromy color space conversion work well for 4:2:2 to 4:4:4 conversion, with good chroma smoothing? It's hard to judge from the vendor talk about it.