Yes, technically it will be outputted to HD signal, however your input source is still 480P EDTV. It will make almost no difference. In fact on some earlier models the processing degraded the image a little bit. However, the HDMI output on up-converting players is really handy as it gives you loss less pure digital connection. so I say go for it just for that, of course if your TV supports it.
In short, don't expect BlueRay quality from a regular player, up-converting or not.