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Wow. I really don't see how that's possible.
The player was billed a as a smart unit so I assumed it would do some snooping and self-configure.
I did a test between bluray and DVD (same player, same movie) on a 32 inch 16x9 LCD TV, and if you were up close, there was a difference. If you watched from 10-15 feet back, there was no difference I could see, other than colors. The colors seemed a bit better on bluray. I've since graduated to a 42 then to a 53 inch TV (both plasmas), and I assume I could see a difference (and I'm closer now to the TV), but I haven't tested it. I do have to say that I've blown up DVD to 92 inches 16x9 projection, and the DVD still looked great, good enough to not make me want to run out and buy bluray to replace my DVDs (especially since they charge too much for bluray and include all the crap I don't want, like a DVD and an electronic copy).
Just as in audio where upsampling or downsampling is not always desireable, downsampling and interpolating a 1080p image to fit a 720p screen does not give as sharp of an image as natively displaying a 1080p image on a 1080p screen.Steve
Funny thing is that's what I deal with as I have a 720p screen and I STILL think it's night and day vs DVD.
Welcome aboard the Blu-Train. But yea, check those settings, and also put a critical eye on the age and quality of that HDMI cord.