What is the impact on picture quality and sound quality of watching a 480p DVD on a 720p or 1080p HDTV?

Right, HDTV is only as good as the signal it receives. It is like asking the TV to upconvert a Free Air Signal from "bunny ear antennas" to 1080p. The best thing to do in your situation is to get a Upconverting DVD Player (Samsung makes excellent ones for about $130). Make sure you go with a good quality HDMI Cable from the DVD Player to the TV, and a High quality Optical Cable from the DVD to the Bose Receiver (Not sure if this receiver has an optical in or not). If the Bose does not have an optical in and 5.1 Dolby Digital Sound is not important to you then RCA will have to do the trick. So sorry you didnt do your HW on the BOSE. It just comes to show that since BOSE systems are not very expandable it just BLOWS!