Haha. Upscaling means the encoder (could be even the original ripper) takes a video (raw) of lesser resolution and during encoding increases the resolution to whatever is desidered. This, of course, brings no new information to the video and thus doesn't actually increase the quality at all, unless some filter configuration benefits from the increased resolution.

Upscaling was more common in the past when HD airings of shows weren't yet so regular and thus some episodes aired in SD were upscaled for whatever reason to HD. Also, sometimes DVD rips were upscaled to HD as if that would somehow make them cooler.