Blu-Ray.com said:
Episode I was shot on 35mm, but here it's been fairly strongly filtered so that grain is scrubbed out, giving a more video-ish appearance. I'm assuming this was probably done to give a sense of visual continuity to the prequels, but it frequently results in softened textures and smeared over detail. The application of DNR isn't nearly as egregious as it was in the notorious Predator re-release, but the image does look a bit off at times, with faces taking on that distinctly smooth, waxy quality that always accompanies excessive filtering.
Wow, the DNR must be pretty bad for this website to mention it... and that's a bummer, I actually LIKE TPM! Shame we'll never get a truly high-quality version since the previous HD tv airing rips contain digital compression...