How is everyone finding the video quality on the new appletv?

I had the old 40GB appletv and got the new one yesterday. To me the video doesn't look as good. Getting a full signal, using the same HDMI cable and playing the exact same video files as before I am finding this on everything from netflix(comparing this to my xbox360 or PS3 actually) to my own video and movies and podcasts ect. Am I just being paranoid or is the video just not as good?

I find the ATV2 to be significantly lower video quality than ATV1.
I have an Mini with an iTunes library I use to stream to my several ATV1s with many movies and TV shows. My "Man Cave" has a Denon 5 HDMI 1080p switcher, with a Mitsubishi 1080p projector on a 110" screen. After doing many A-B comparisons using the same media streaming to both ATV1 and ATV2 in this room, I find the video quality to be significantly lower for the new ATV2 compared to ATV1.
I'm a fan of all things Apple, but I'm really disappointed with Apple's decision to dumb down the ATV2's resolution to 720p, - it REALLY shows on a big screen.
AND, I'm ready for Apple to update the ATV1 software to support Airplay - PLEASE!!
Thx to all who posted on this thread...

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