Having just viewed this film on a new XA2, I must agree with your observations on the PQ quality. While certainly not bad, it has a considerable amount of grain in some scenes, more than I remember when wiewing the film in the theaters many years ago. This is far from the best PQ I have seen on an HD release, but it is still a great film.
The Sting is indeed a great film and one that's on my must own list. I recently watched the relatively new Legacy Series dvd from Universal and it too has some grain...but it was WAAAAAAAAAAAY improved over the full frame dud they put out back in the day. I'm sure the HD-DVD will be an improvement on what I just saw.
I saw the film twice in the theater (found the multiple cons so fabulous I had to go back and watch them happen after I knew the surprises to come), and the grain we see now was also present back then. I suspect George Roy Hill wanted it to look this way hence the sepia-tinge to the photography to give it a period look and the various wipes between scenes to also aid in giving the movie a period flavor.
You could weel be right about the grain being in the theatrical release. As I get older, my memory sometimes fails me . All in all, this is a respectable release of this great movie.
If we don't get Mr. Robert Harris' thread then it's a good bet the lack of it would be telling. This is the kind of film that he would comment on and recommend if it's worthy. The story continues....
While this title on HD-DVD may not be perfect it has to be way better than the pan and scan version I currently own on SD-DVD. I will definantly be buying this title soon on HD-DVD.