@ChrisC and @CADmonkey
Absolutely, I've got a relatively small 32" panasonic TV (with adverts) that IMHO has one of the best processing engines for handling the state of the freeview signal coming in, and sit a good distance away from it, yet the picture is still a disaster most of the time. From blocking in anything fast moving, to MPEG artefacts and redy brek outlines around people, to floaty corruption even displayed in otherwise static graphics, the results of a poor compression method and lack of bandwidth - rather than a lack of resolution - are clear.
I used to hold that Sky were pushing the SD bandwidth because the majority of people don't really notice or care, but then they started flogging HD on the quality of the image. Freeview and Virgin appear to have also adopted a similar standard of SD quality. So maybe they all made SD so poor that HD becomes a quantum leap in quality and therefore a desirable product.
I think you might have misread my post - I've got HD and indeed have not rejected it, but am making the observation that IF it was as visibly compressed as the SD we get (which it isn't) then it WOULD be rejected. I agree with you about 3D but not about the content (my PVR is full of stuff I would like to watch given the time) but that's going off the subject at hand.
However I'm sure either your CRT is out of focus, or you have poor eyesight - digital, on any domestic platform, viewed via any type of TV is visibly compressed to hell with all the artifiacts that brings. I can see it very easily on an old 14" Philips PAL monitor, which is gutting because off-air PAL used to look genuinely astounding on it.
Personally I find the sharpness of HD TV given the right programme, PS3 and BluRays all quite stunning, but the poor quality SD we get fed with these days pronounces the effect.