Rocktim, I also have the same combo, S97 & AE700. The problem with Macroblocking was not that bad with the original firmware for me. I do agree that it is even better now. I have not seen any Macroblocking yet with the new firmware. It seems cleaner at 720p. but that could be just a perception since I can't compare the old firmware with the new firmware. I feel that for those who own the AE700 the S97 is the best DVD player to use. As close as we can get to HD quality at this time for the price. Regarding the "white flash" problem, I have been in touch with Panasonic and expect a response at any time. I will post it as soon as I hear.