For those who have never seen smearing on their 8700, let me say that it does not show up all the time. I can watch for a whole evening without seeing it once. The key factors for me seem to be:
1) It only shows up on HD channels. The sharper the channel, the easier the smearing is to notice.
2) I have yet to see it on a DVD.
3) It only shows up on reasonably fast pans across focused, high contrast objects. The perfect torture test is a medium fast pan across spectator's faces at a stadium. You won't see it on slow pans, and with very fast pans you may not notice it because it's harder to follow with the eye.
4) It's NOT like the blurring in film during a pan. It's more of a solarization effect, where there suddenly seems to be coarser steps in color and shade in the panning region.
I get HD channels via RCN motorolla cable box/DVR combo, feeding to the 8700+ through DVI. The cable box runs as 720p for all channels (so no scaling in the 8700).
My DVD player is an older Toshiba progressive model, connected via component cables and running at 480p.
I've also tried pausing the HD picture with the DVR while the blur is happening. The blurring effect seems to disappear while the picture is paused, so I don't think this is a source compression effect.