A lot of publicity stills released are usually better than the actual game, with better AA and AF, take Halo3 for example. The game will probably be more jagged, or more noticeable with motion as you play. I'm sure if you connected your PC to your 37 incher and viewed those screenshots you like so much, it would look exactly the same as it did on your PC monitor, thus, it's not your tv that's the problem with the game, but the game's fault.
Anyway nearly all, like 99%, of 360 games are 720p or lower. Only 2 games I know of as months ago are 1080p. Setting the 360 to 1080p despite that isn't the problem, as I would think the 360 upscales 720p to 1080p better than a lower end TV would. As the TV, despite giving it 720p, itself has to upscale it to 1080p in order to display fullscreen.
And even if it's not a $5000 Sony LCD, a lower end LCD will look amazing with HD games. Sure the blacks might not be as good, or bright enought to make your eyes bleed, it still gets the job done without spending a fortune. I mean, it the quality with the higher end ones made such a difference, why don't people pay $1000+ for their 20 inch widescreen PC monitors instead of the $225+ range?
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