Let's get some sense and technical truth on the go here.
Freeview is far from lossless. It uses MPEG2, same as on DVDs, but typically at a lower, constant bit rate (vs DVD's high, typically variable rates) and sometimes at lower pixel resolution too.
When it's fed a decent amount of bits, has a good encoder at the broadcaster end, and the material shown is sympathetic to MPG, it looks fantastic, slightly sharper than broadcast and without the dot crawl and slight fuzz that my local analogue transmitter produces. When it has less bits available (channel overcrowding and bandwidth/resolution choices made by the same clueless cretins that think 96kbit stereo is just fine for MP2-based DAB), a poor encoder or more demanding material, it becomes a horrific blockfest that will have you offering your writing arm as sacrifice to get good old PAL-I UHF back. This year's Eurovision repeats and Glasto coverage were a stark case in point - some of the shows were nearly unwatchable thanks to blocking, as it appeared to be attempting full DVD resolution with VCD bandwidth, in order to transmit some very high motion performances with intricate and very colourful detail. A resolution drop might have helped, and a quiet fallback to 25fps progressive (slightly jerky and aliased 352x576 with moderate distortion beats a screenful of 8x8 blocks moving at 50fps interlace in a 720x576 frame), but you can't count on the guys at mission control to think of such stuff.
Your results WILL depend on where you are, what channel you're watching, and when, as the different multiplexes in various parts of the country will have their own bandwidth limits and number of channels fighting for slots within that. As well as different content being shown, and actual number of airing channels differing throughout the day. You may never have suffered this disease, or it may be the bane of your life. I count myself fairly lucky that it only rears its head once in a blue moon, but then I do tend to stick to the main BBC stuff (...and Dave/Virgin1) which gets a bigger slice of the pie. Wierdly, the shopping channels also seem to be smooth as silk.
It's definitely nothing to do with signal strength though. MPG failure results in a whole barrel of other image freakouts, instead of simple blocking. That's one of the weaknesses in the system, at least until the promised power boost that comes with analogue switch-off. An oldskool signal will remain sort-of watchable with crap reception, until the audio becomes drowned out by noise and the image circuits are no longer able to derive accurate sync pulses (by which point, colour has gone, and you're left picking out silhouettes from the snow anyway). It's very graceful and gradual in it's failure mode, and I was very glad of it when living in north Wales, where our student dinner time Buffy fix gave the impression that the hellmouth was, unlikely as it seems, wrapped in a perpetual blizzard. With freeview, we'd have got nothing. Depending on your receiver, the picture will either continually lock up, or it'll go to a blank "no signal" screen, or - like my nan's cheap telly - display the signal in the raw regardless, with all the nightmare fuel that is the unmoderated output of a f***ed up mpg stream. Download some mpg files into your PC, use whatever method you feel like to throw a very small amount of random noise into the data stream (to emulate the sort of noise you'd hardly notice on analogue being _mostly_ but not entirely filtered out by the transport stream's ECC), then drop it in media player and watch the hideousness unfold. "Paint walls", psychedelic colours and distorted faces abound. The effects are often block-based, true, but rarely give a "proper" blocking effect unless it's your decoder being VERY clever in it's error correction.
So lets hope they can implement better signal strength AND higher bitrates somehow.
On which subject, I'm all for the variable bitrate idea, it's excellent for squeezing good quality into smaller filesizes in digital media... but I dunno if it's going to work in the broadcast arena. Or if it's even necessary. What happens if all, or even just a majority of the stations on a multiplex want to go to high-bitrate mode all at once? There's not going to be the bandwidth to allow it. There'll be massive compromise (and how in heaven's name do you balance it all anyhow, unless the encoding is only done all-at-once at the actual transmitter and everything to that point is either uncompressed or full-bore?) ---- and once you hit the point of that happening everyone once in a while, kiboshing the attempt to give a consistent apparent quality*, you may as well stay with CBR instead. Oddly, this is even what the iPlayer does, despite being online and serving up largely non-live material, where you could make good use of VBR efficiency. All the iP streams are fixed-rate. But, in doing so, they've also shown that there may not be need to vary the rate so much - the highest bandwidth offering at the moment is 3Mbit/s, for 720p (25fps, mind... unless it's my media player being wierd, cuz I could SWEAR it's said 50fps and gone smoother occasionally), and under almost all circumstances it looks just fine thanks to the MP4 (H264) compression that DVB-T2 also uses. Treble that to reach 1080p at 50fps (economies of scale occuring in both size and framerate) and you're still under the magic 10Mbit/s "average", which gives you a bit of overhead for those insanely OTT subtitles (MUST have a signing option, surely... I'm sure ceefax 888 got away with about 200 bits/sec for text), audio description, error correction, a slight quality boost, etc.
(It also has "ED" rez stuff (832x468, 25p framerate) at 1.5mbit and SD-ish (640x360) at 0.8...... and it still looks alright, meaning with such encoding we could probably cram in 50% more channels on each existing multiplex and it'd STILL look better and have less blocking. However the effects of interference would propagate for longer, given the bigger intervals between keyframes - a lot more of MP4 is made of "delta" frames that merely encode changes from the previous one, so if your TV thinks one frame is different from how it should be, that mistake's going to stick around for 3 or 4 seconds rather than the half-second or so maximum for MPG2)
Sooooooooo this'll be interesting to watch. It could be made of win.... or divebomb spectacularly. Let's hope it's the former, because like DAB it's unlikely we'll see a U-turn regardless of how horrid it gets.
(Now, can we maybe ditch DAB before it gets too much more market penetration and replace it with something using a more widespread and modern standard, maybe like what they have in europe or the states? Perhaps something like the AAC used in MP4 files. That sounds perfectly spiffy at 128k... Or at least can we use better MP2 encoders? I've used good quality ones that actually turn out listenable files at 160-192k, 128k when downsampled to typical broadcast quality (15.5khz) and 112k if you further compromise the headroom, though 96-stereo is still unsalvageable. Problem is, they're slowwwwwwww (maybe 2x realtime on my modern laptop), but it should still be OK for piping thru a server and out to air. Then we can work on beefing up the signal strength)