I had a similar problem with my front projection set up.
My Panasonic DVD S97 was connected up via component (and HDMI, but for this instance, component was the problem) through my Pioneer Elite receiver, and then to my Sanyo Z3 projector. I had the projector doing the 1080 upconversion, and thus it had a delay in processing time and the lip sync was noticably off.
I just looked in my DVD player manual and it showed me where I could change the setting on the DVD player to delay the audio. I had quite a range of settings and just increased the delay until it was right on. Of course now I just let the DVD player upconvert and send the video via HDMI so it isn't a problem any more.
Not sure if this helps or not, but if the display is doing the upconversion, then this could be a problem. If the signal coming IN to the display is already HD, then you should be OK, or so I would think....
Just my thoughts, take them for what they are worth.
