I think MUSE LDs are (were?) 1125 lines. So, about double NTSC's 525 lines. Keep in mind some of those lines are not meant to be seen (just like only about 483 lines of NTSC contain picture info). I'll betcha Wikipedia can tell you all about it.

Yup, it can: http://en.wikipedia.org/wiki/Multiple_sub-nyquist_sampling_Encoding_system

I don't believe there is (was?) any upscaling available from any LD player, including the X0. That's a bit much to expect of a fundamentally analogue medium! Especially at a time when almost nobody (except a handful of Japanese) had HDTVs.