All ATSC formats can be upconverted to 1080p/60 without data loss. All info from the lesser format is retained, but you've only got what comes in the package. No dropped frames or interlacing artifacts inserted, but 480i is still going to look more 'soft' than 1080i when presented, and 1080i will look more 'blurry' than 720p with motion, even after upconversion to 1080p60. I'm sure the upconverter will do a fine job, but it can't invent detail, just preserve what it's got & smooth over the scaling in the spatial or temporal axes.
The time for dealing with compression artifacts is at the time of compression. Compressors use different algorythms for compressing different scenes, depending on which gives the best compression ratio... but a human operator can override this method choice to produce a better looking result even if it means a few more bits in the stream. Problems arise when the compressed stream must fit in a certain bandwidth, so it has a limited bitrate. Now it's a question of what aspect of the image do you compromise to fit into what room you've got in the channel. Color res, spatial res, framerate? Being a good operator isn't an easy job... and the automatic choices used with real-time auto compression aren't that smart. This problem of channel saturation is more of an issue with 1080i than 720p, since 1080i is trying to push about 10% more pixels per second thru the same sized pipe... 720p has a little more 'elbow room' for those scenes that take more than average bits to show well.
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