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I suspect that will help a bit with colors, brightness, etc, but I can't see that playing a big roll with the poor quality picture that I'm getting.
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That's because you haven't tried calibration yet. Like I said, you're experiencing what 90% of new HD owners experience. (The other 10% are experienced HT types who automatically calibrate all new TVs before they even try to watch them.) And in 90% of cases calibration makes a dramatic difference to the over-all picture quality,
not just brightness and color. (And it is flat-out impossible to adjust a set to industry spec "by eye". If you're not using test patterns, you aren't seeing what the broadcaster is trying to send.)
Just killing all the pre-set image processing and above all
losing the "sharpness" will get rid of the graininess and blocky appearance in SD channels, which are mostly the result of distortions and noise introduced into the signal by the factory settings. (One classic symptom of bad pre-sets is that areas that should be smooth transitions between similar shades of color - the ocean blues in underwater shots or the reds and oranges in a sunset - will appear as distinct bands or rings with very sharp boundaries. Sound familiar?)
But, again, there are limits. One way to see this is to watch ESPN HD on a properly calibrated set and then see the highlight reels switch between sources that originated as SD and those that originated in HD. The SD stuff looks like crap because the signal basically
is crap and you're now seeing it on a set that can display all of its flaws. An NTSC display conceals a multitude of sins. That's the downside of going to HD.
On the other hand, you'll probably find yourself gradually watching less and less SD programming anyway.

I hardly ever do these days. At this point there is more HD programming availabe on my cable system than I have time to watch in a given week anyway, so I don't miss whatever is on the SD channels that don't have HD versions.
Regards,
Joe