I just got my Sony 46XBR4 about a week ago. I also just had FIOS installed as I had no HD service with my prior provider.

At first, HD was simply incredible, but now I seem to notice that PQ is more questionable. For example on local HD news coverage, if I sit close to the TV seems blocky or "jagged" for lack of better terms, plus these blocks or jaggies do not move smoothly with scenes changes or camera pans. Sitting further away from the tv alleviates the issue, but its still there.

At first I thought it was my TV, but I just hooked up a PS3 as a Bluray player, and nothing could seem sharper or better looking than Casino Royale on Bluray, so I don't think its the TV.

Is what I'm noticing simply the difference between 1080i and 1080p? Could FIOS be the issue?

Any suggestions/help would be appreciated.

Verizon FiOS passes through local HD signals (OTA) without any extra processing or compression. They are one of the few providers that does this.

If you are seeing artifacts on your local news, then that would probably be due to overcompression by your local affiliate. Not all local affiliates allocate the same amount of bandwidth to their HD feed, just like not all Blu-ray disks are authored using the same high bitrate for the film feature.

You've got to remember that video bitrates on Blu-ray movies are as high as 40Mbps. In contrast, local networks like ABC, CBS, FOX, and NBC only have 19.4Mbps available to use with their feed, and some local affiliates split that 19.4Mbps between the main HD channel and a SD feed like a weather channel (ex: 15Mbps for HD feed, 4Mbps for SD weather channel). The lower the bitrate, the higher the compression, and with more compression comes more artifacts, especially during movement and camera pans.

A number of FiOS HD channels use bitrates in excess of 18Mbps. Examples include Hdnet and Hdnet Movies.

Check your local forums here. (http://www.avsforum.com/avs-vb/forumdisplay.php?f=45) It may be that your local channel is multicasting.