I apologize for the delay of this response. I've been on the road and in meetings last week, and am finally catching up.

SD channels will unfortunately look "far worse" than any other TV in the house if every other TV is a standard definition TV. One of the things I might do is see if your DVR will output only 720 and 1080i signals. The 480 resolution is standard definition, and you want to see if maybe you can get your box to upconvert the picture a little before it sends it out.

The onscreen guide will look pixelated because that also is being broadcast at the output resolution. It will likely look better in 720p or 1080i. But the guide will match the output. So you can't have a 1080i screen guide mixed with a 480p resolution picture behind it. The box knows this, and defaults likely to the lower resolution.

If you need a reference, one of the things I might suggest you do is go to your local retailer and have them show you all of the HD televisions showing a SD picture. Chances are, it will look very similar to what you're seeing.

Keep me posted.