Upscalers are typically tools to achieve display compatibility when a monitor doesn't support certain lower resolutions and/or connection types. It stretches stuff to fit stuff. Stretching Wii's 480p picture to 720p+ doesn't increase the detail in the picture (in many ways stretching SD stuff just makes them look worse), but the upscaler enables the Wii picture to show up on someone's LCD computer monitor by acting as an adapter.
An HDTV only has one resolution: whatever it came with. When you hookup a Wii to it, the TV will upscale the picture to fit the maximum screen size anyway (disregarding various zoom options). The quality of the upscaling method varies among TVs and upscaling boxes, just as image editing programs offer different resizing methods (bilinear, bicubic, lanczos, etc).