Well, I'm a three hour drive from my copy of MTW2, but if you or anyone reading here has got it handy, they can check it themselves. Just set up a custom battle with two identical units (preferably units with easy to see weapon changes, woodsmen and cossak musketeers work well. Teutonic knights work ok, but you have get them to put away the lances first), one with weapon upgrades and one without. The Woodsmens axes should become all fancy and engraved, muskets start looking more like muskets and less like 2x4s and maces change from cans on sticks into flanged maces and morning stars.

I doubt that I am mistaken, I used to spend a lot of time in custom battles putting weapon and armor upgrades in various ammounts onto units just to see how they looked. If I am mistaken, that would mean that I'm likly some kind of crazy, and maybe on psycodelic drugs of some kind.

But I think thats the kind of think I'd notice.