Are you using Aero by any chance?
Have to say, from my own perspective, digital terrestrial TV (freeview), both in terms of sound and picture quality is very much clearer here then analogue is. Not quite the difference between VHS and DVD, but not far off. Not ever having owned a massive telly I can't comment on artifacts. Perhaps you should have the TV dialed in professionally. From what you're describing it sounds like your contrast, brightness and sharpness levels are set waaay too high.
i DID have aero on, but even with it off, especially when there is any hard drive activity, there is a delay-albeit slight- in the start menu opening or menus dropping down from the menu bar. Look its not something that i can't live with it, it just doesn't feel as responsive as what I am used to on Amiga, and IMO with all the raw hardware power, I expect it not to happen at all. Amy be my expectations are too high.
Digital no doubt is clearer in the sense that you don't get any ghosting, or snow like you do with analogue when the signal weakens.
What I'm talking about are definately digital compression artifacts. I see the same thing with display TV's at retailers, and Pay TV booths in shopping centres, even with the newest panels with 1080i. Its due to the way that fast moving objects like football players
are displayed in front of the background grass: there's a lot of quick variation in color between where the outline of the player ends and the background begins, and the system has to interpolate an in-between color or two, resulting in a fringe. If you also look at the crowd moving past in the background as the camera follows a player, its basically shown as blocky incomprehensible mess, again due to compression interpolation of fast moving regions. This is also visible on DVD IF you have fast moving action like watching sport.This has been especially noticeable in the Confederations Cup in Sth Africa at the moment. Initially I thought it was my TV doing the scaling but it happens on all the TV's I've watched on display