... upscaled by the Wii U, or upscaled by your TV?
If the TV is saying it's getting a 1080p signal, then it's been unscaled by the Wii U.
Plug a Wii in to a 1080p TV, and your TV will get a 480p signal which the TV will upscale to fill the 1080x1920 screen.
Upscale is such a shitty word. It makes gullible people think that the games actually run in higher resolution, when all it really means is that it runs in the same shitty resolution except stretched over a bigger picture.
Basically it does nothing except add some blur.
Any non-native TV input is going to get upscaled. But how clean/ugly that scaling looks depends greatly on the device doing it. In general, HDTVs have pretty poor upscalers in them. Higher end Panny plasmsas and Bravias are pretty good, but no where near as good as dedicated scalers.
The b/c PS3 did a wonderful job of scaling PS2 games when connected to HDTVs. Far better resulting image than the same game played on a PS2 and the TV doing the scaling. Hopefully, the Wii U will be the same. I believe that in general, AMD GPUs offer decent scaling, but I might be wrong as I'm not really across PC tech.