Mountain Lion Mac OS 10.8 degraded my HDTV 1080p display

I just upgraded to Mountain Lion today on my Mac Mini (2.4GHz, Intel Core 2 Duo - 8GB RAM) which is connected to 40" 1080p HDTV. The display quality degraded. The quality with Lion 10.7 was great. Text was sharp. After this upgrade, it kind of blurry. Black text has hues of blue and red. I can UNDERSCAN in the DISPLAY (STD HDMI TV) system prefrence, a slight smidge to get rid of the hues, but black text is still not sharp. It just doesn't look the same. Refresh rate options are 60 Hertz NTSC, 50 Hertz (PAL), and 24 Hertz.
What changed with this Mountain Lion OS upgrade to make the resolution weaker?!! I feel like I'm looking at an iPhone 3GS when I had an iPhone 4! It's not horrible, but it's not great either. Well not as sharp and clean as Lion was. 
I'm not happy... It would be a shame to go back to Lion. But Mountain Lion 1080p just doesn't look good!
b

I was having the same issue too - driving me crazy! What I found with my monitor though (Samsung 23" LCD) was that if I set the resolution (through normal Mac preferences) to 1080p it would scan the whole desktop bigger than my LCD. 
To correct that though, DO NOT use the 'underscan' feature in the display settings in OSX. That's what causes the blurriness.  Check your monitor and see if it has settings to adjust picture size. For me, in the monitor's menu there is an area called 'size and position' and in there is a section called 'image size' which you can set to 16:9 or 'screen fit'.  Choosing screen fit scales the whole overscanned desktop image to down to fit the screen area and....
EVERYTHING IS CLEAR AND CRISP
See if you have those settings available in your monitor before toying with the underscan feature in OSX.

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