A DVD is higher res than standard def, but it's not high def (HD). Just do a +View - Actual Size+ in DVD Player while playing the DVD on your iMac, and that's how many pixels it really takes (probably about one-quarter of your screen).
Some HDTV's may have much larger screen size, but the pixels are also bigger. A high-end "1080p" HDTV has a resolution of 1920×1080, even if it has a 52-inch screen. Your 20-inch iMac screen at 1680x1050 almost has as many pixels. Plus modern DVD players and HDTV's use other tricks to make the image look sharper.
If you downloaded an HD video file, it will definitely make a difference. You can use Apple's QuickTime movie trailers web site to try it out.
http://www.apple.com/trailers/
Note: The 720p files download much faster than the 1080p files, and look almost as good on my iMac's screen when you give the +full screen+ command.