This isn't the right forum for your player, this forum is for combo players (blu-ray and HD-DVD). I'm not trying to pick on you, I'm only saying this because you might have better luck getting help in the correct forum.
Generally you only need an update if a title won't play at all.
It's not clear to me what jumping and jerking are. My recommendation is to set the BD player's output settings to their defaults. Many custom settings can just screw things up.
Grain is normal. Typically you will see it in dark scenes and not in bright scenes. You didn't see it on DVD because DVDs are much less sharp and the grain is lost (along with a lot of detail). If you are a grain-hater and don't care that it's normal, you can usually get rid of it by turning on Digital Noise Reduction in your player or TV. The downside is that you also lose a lot of detail and the picture becomes softer. You might as well have got the DVD at that point instead of the blu-ray. The Digital Noise Reduction setting might be called something else in your particular equipment, such as Sharpness or Smoothness.
I seriously doubt any of this is the cable. Cables carrying analog signals can cause image quality problems, but the way digital signals work you always have one of the following three situations: (1) full perfect picture and sound, (2) nothing at all, or (3) intermittent picture and sound. I've never heard of quality degradation due to an HDMI signal and I don't understand how that would happen.