HDMI upscaling allows your DVD player to send a sharper signal to your HD-ready TV (from a standard DVD) , via the HDMI socket, than it could through a Scart lead. A true HD-DVD player wouldn't need HDMI upscaling if it was only to be used for playing HD-DVDs (since the quality is already present in the signal from the DVD) although they all have it to get the best out of conventional DVDs.
The Argos catalogue states that HDMI upscaling provides 'extra sharp, almost High Definition playback on an HD Ready TV, when you have an HDMI or component video connection'. The problem with making sense of that statement comes when you ask what is meant by the use of the word 'almost'. One of the reviews in your link indicates that the reviewer was impressed with the increase in quality when he switched from a Scart connection to the HDMI one. However, this eBay article advises anyone against paying extra for HDMI:
http://reviews.ebay.co.uk/Should-I-buy-a-HDMI- DVD-player_W0QQugidZ10000000001866382
Since you've only paid a low price anyway, the financial aspect of that review is irrelevant but it's clear that the writer would want to challenge the use of the word 'almost' in the Argos definition of HDMI upscaling.
Although it's not directly relevant, you might also be interested in this article about HDTV, from the same writer:
http://reviews.ebay.co.uk/HDTV-what-you-should -know-before-buying_W0QQugidZ10000000002293724
Chris