From what I have read, the value of a DVI/HDMI connection depends on the type of display used. A CRT based display (direct view, RPTV, etc.) doesn't necessarily benefit. I've seen postings that range from no difference to noticeable improvement.
There is a higher probability that a fixed pixel microdisplay based TV (DLP, LCD, LCOS) will benefit from DVI/HDMI. Even here, the amount of improvement varies from what I have read.
From my own personal experience, DVI does improve the PQ, for both DVD and HD-STB sources, compared to Component, on my Samsung DLP (HLN617W). In fact, the improvement is quite pronounced. One of the reasons may be that the Samsung has a native resolution of 720p, and if you feed it a 720p signal via DVI, it displays that signal directly (does not do any additional D/A, A/D, or rescaling).
I went out of my way to get an upconverting DVD player, and made a quick comparison when I first got the player. While playing a DVD, I switched between S-Video, Component, and DVI inputs on the Samsung (all connections are active on my DVD player). Component was better than S-Video, and DVI was better than Component (my DVD player has an HDMI output, so I use an HDMI to DVI cable).
I also upgraded my HD-STB to one with DVI as soon as it became available. There was little if any difference between Component and DVI on the HD channels, but DVI was definitely better than Component on SD digital channels.
Bruce