I was thinking, could one build a PC that accepted an LD's composite input, comb filter it, de interlace it, upscale it to 1080p then output it to an HDTV? If so, since the PC can devote more resources to this job than a traditional upscaler would it result in better quality upscaling? Additionally could this be achieved entirely with software so that it could be easily updated if better up scaling algorithms ever were developed?

I've seen some threads on ths AVS Forum about building HTPC's for that purpose. It is a solution, but there's definitely a cost vs benefit decision that you'd have to settle with yourself.

I was hoping to totally build it myself to lower costs, and have the decision over what parts get put in there. I don't want to have to settle with something like only a 3 Line Comb Filter, like I have to with upscalers.

My 2004 Sony Vaio PC has an excellent MPEG-2 and AVI encoder with a full color bandwidth 3D comb filter... I can make a copy of a LaserDisc and then deinterlace it and upscale it in Sony Vegas Pro. However, I prefer to keep the video in its native interlaced form because newer and better deinterlacers and upscaling are always appearing in blu-ray players and I make DVDs of my LaserDiscs. Lately I've been using my Panasonic DMR-E20 Pro DVD recorder because it also has an excellent TBC & full color bandwidth 3D comb filter plus an optical input to record the PCM LaserDisc tracks without any lossy encoding - it just changes the sample rate to DVDs 48kHz. I pull the video/audio from the resulting DVD-RAM into Sony Vegas to make full menus, etc... And make a new DVD without re-encoding the video or audio. Plus, I don't have to move my LaserDisc player over to the PC to digitize a disc.

There is a software called Dscaler that works in conjunction with TV/VIdeo capture cards. You can de-interlace and/or scale any composite input and output it via VGA, DVI or HDMI, whatever your Video card allows.

http://deinterlace.sourceforge.net/

I think that generally using a computer is not a great idea. It is all going to come down to the comb filter and not some fancy "processing." Also, audio conversion part is not ideal as your taking a analog signal coming out of the LD player than converting it to digital and then back to analog again. Better to run the audio analogs directly into your receiver.

disclord-
If you are converting LD audio to DVD 48 khz you are going to get some sound degradation. You can't convert audio into another sampling rate and not loose something in the conversion process (even if it's up-converting). Can somebody please confirm this or am I mistaken? Also, the video quality will be degraded as it's another encoding process. If I am mistaken, please correct me.

Well with the video thing, he could (and probably should) get a card without MPEG encoding (if that's what you meant by encoding).

And to OP, I'd recommend using a comb filter and the S-video input on your capture card instead, from what I gather, these cards don't tend to have great comb filters.
Not to mention, unless you already have an old computer you're willing to salvage for this, it'd probably be cheaper to get a second hand scaler off eBay.

Sample rate conversion can be a totally audibly lossless process, especially when going up in rate. The VAST majority of digital LDs were sample rate converted from the professional 48kHz rate to 44.1 -the THX program even made a big deal out of using the Analog Devices converter on the Star Wars Definitive box.

My Sony PC lets me capture video either in MPEG-2 at 9mbps or in an uncompressed AVI format that is HUGE in size. It captures video at 4x the color subcarrier rate with 8 bit resolution, which is the same as the D2 VTR format used to master LDs in the 90s. Plus, as I said, it has an excellent 3D comb filter that has full color bandwidth of over 120 lines. Running test patterns into it from Microsoft's test disc via a DVD players composite output, I've never seen any loss of resolution or other degradation that would make it unsuitable for LaserDisc capture.

I don't think this is truly accurate. Lossless audio conversion by it's very definition means that you can convert between formats back and forth and you would get the same exact result. I am almost 100% confident that converting a 44 khz audio file into 48 khz and then back again does not give you the same result (you can try this and compare a checksum on the original 44 khz file and the reconverted 44 khz file, they will not be the same). I guess you could argue "audibly lossless" but that is not really a scientific term and will depend on hearing acuity. In high end audio, 48 and 48 khz is actually not that impressive as SACD's and DVD-Audio disks sample at much higher rates.

As for the Video, there is going to be massive changes to the stream, especially with mpeg conversion as it will introduce all of the digital artifacts of that format (this is why many people prefer the analog video of LD to the digital picture of DVD). Uncompressed avi will give a "better" representation of the original material but once again, because the original signal is analog, you would need a very high resolution digital signal to reproduce it at a very accurate level, probably a few times the digital resolution of DVD (this is need to reproduce the "bleeding" of the scan lines with LD even though the true resolution is on par with DVD 480).

I'm not arguing that people can't have "good results" with the above method, but it's not a "lossless" conversion and your losing the "analog" video quality of LD in process (which is not a desired outcome for many LD aficionados). IMHO.