Resolution is horrible on new ATV3

So I picked up the new ATV3 on Friday and have it all hooked up to my Denon AVR2311 receiver using HDMI. Everything seems to be working but all of the content looks horrible when I view it on my 55" TV. I tried iTunes content and previews of 1080P movies and they are very poor quality. Not even close to 1080P. I've read the discussions about the ATV3 not playing nice with receivers and switchers so as a test, I ran the ATV3 directly to the TV and the result is the same. Surprisingly the menu content looks amazing but the videos are very poor. I tried a smaller TV in the bedroom (22") and it made a slight improvement. Any suggestions before I take this unit back to Apple? My resolution is set to Auto. This is the first Apple product that I am truly disappointed in. Thanks in advance.

"I have connected ATV 3 per HDMI to my Receiver ( pioneer sc-lx82)" - "But no luck! It Quits with an error, that my tv doesn' Support the resolution."
It's not technically plugged into the tv is it?
I'm not for sure why a lot of folks are connecting their ATV through their reciever, but remember that your receiver is not a TV and you stand a strong chance of getting an error. I'm sure your tv has more than one hdmi port, so why not use it directly?
I had a friend trying to hook everything up via cables through his reciever driving himself mad over a optic cable... I said to him, to what end? I explained in simple terms that all he needed was one optical cable and thats it. Plug it to the tv leading to > reciever. Anything that plays audio through the tv will go to the reciever via the optic cable. Same goes for pluging that ATV via HDMI to the tv... It will play the audio thru Optic cable leading to reciever, you are good to go. It's that easy.
Last bit of advice... It's a really bad idea using leads from a reciever to a tv. Always remember the good way is a lead from the tv to the reciever and nothing else.

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New ATV3 Won't Display 1080i

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Mystery solved. I've found out from other Internet searches that all of the above responses were 100% technically correct. Apple's support for 1080 HD is exclusively limited to the "p" (Progressive-scan format) and does not include support for the "i" (Interlaced format). That was the answer that I was looking for.
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Seriously!
I was demonstrating it to some friends yesterday (OK, showing it off!) and while we were still on the main menu page, some really spooky sounds started coming out of the speaker system! They disappeared when I played some music, but when I went back to the menu, they were there again.
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Resolution is horrible on new ATV3

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