I never scale up with Photoshop, only down.
The problems starts when you... UP-scale.
I have a Genuine Fractal in a Unit but to be honest I hardly use it.
In my approach, I choose on purpose size-resolution directly from the Raw original, regardless of the camera resolution.
So yes, it can be done in C1 from the very beginning.
If you do not do that from the beginning, the results when you apply filters, styles, sharpening etc...may be disappointed.
My personal rule is: Sized up from the beginning in C1 then work on the image / Sized down at the end in Photoshop.
But that is of course very personal.
edit: Oh yes, I forgot: I shoot only raw if what I want is boosting the reso.(and I want it often)