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Some HD panels look quite good with SD signals, but it depends a great deal on the signal and how the set is adjusted. The first thing to do is to calibrate the set properly. Start by turning off any processing that you can, get the set out of the most vivid picture mode, and get your settings corrected using at least a test disc. Turn the sharpness way down for SD.

HD sets do not inherently make SD look bad in all cases. Some do a lousy job with the conversion from SD to the native resolution of the set, and some overenhance noise in the signal making it look more objectionable. Low quality video is going to look worlse than HD, however, because it is limited in quality to start with. You can only get so much out of it. Avoiding enhancing the garbage is often the best that you can do. Some systems, like the Sony DRC, can be adjusted to improve most SD, but they can be tedious to work with.
 

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Plain ole user
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The better the display the more flawed SD looks though, double edged sword.
I've owned a plasma from all three of the big three and a few dlp's and an sxrd and none of them can touch an HD-crt.(like the 34xbr910 I have in a bedroom now)
His old rptv was probably a 7" crt.
You can get the same effect as a CRT by simply turning down the sharpness and softening the pix. The notion that a better display will show more of the limitations in SD is correct. This does not mean that it will look worse, just that the limits of resolution and any artifacts will be more obvious. A better display will not only resolve more detail, however, but will also do the conversion with less artifacts. The advantage that CRTs had is that they could run at NTSC scan rates or 480p and not have to scale the to a higher res. The better sets these days do a great job of sclaing and de-interlacing and look considerably better, even on SD, when adjusted correctly.
 

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Plain ole user
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In what way, on what kind of signal, with what settings? Can you be specific?

A CRT is simply a LPF compared to the newer sets, while the newer sets can get into trouble by being set to actually make analog noise and qauntization error appear much worse.
 

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Plain ole user
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Try turning the sharpness way down on SD material.
 
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