I’d argue that the LD-transfers are a better option: Upscaling to HD, then downscaling the footage back to SD isn’t doing it any favors.
If that’s all that happened, I might agree–but we’re not talking about simply upscaling a small image to a large size and then downscaling it back to a medium size again. Even on a GOUT-only frame, there’s image stabilization, dirt/scratch/glue mark removal, and color correction–all of which are much more noticeable than the barely-perceptible-at-best quality loss from the scaling roundtrip, and make a DVD downscale noticeably better than the GOUT source. The HD-sourced material looks so much more detailed on an anamorphic DVD downscale than the GOUT, that I think that anyone who finds the little compromises of the DeEd’s worth it in HD will also find them worth it in anamorphic SD. The increased detail of the DVD over the GOUT is staggering, which says something about the GOUT. Not to mention that, among its other problems, the GOUT uses 93 audio. Of course, other people’s priorities may vary.