Believe me, I play around with the settings on the LCD all the time and it never looks good. "Picture" I assume that means contrast is at 100% too. I can use an auto exposure setting which helps but that makes the brightness flicker up and down at times. It does give more detail in blacks with that setting but the gain (brightness of the whites, right?) is muted.
The thing is, CRT and projection look decent at factory setting. They can look great when I adjust them. The LCD tv looks TERRIBLE out of the box and with a ton of adjusting and fooling around, might look ok.
As for pixelization and artifacting, I think it has both. Standard channels also being broadcast in HD tend to look bad, particularly ESPN which is equivalent to the 4 hour setting on a dvd recorder. Some videos on youtube look better. What should have been solid red colors showed tiny moving black dots during the Arizona Cardinals Monday night football game. I want a tv to display a moving picture, not a bunch of tiny flashing dots.
Does HD really have more clarity? It has more resolution but clarity I think should mean lack of anything that makes a picture less than pristine. Digital compression means less clarity.