I only get the blue dots via the PS3 (set to output at 1080p) when using the xmb, watching 1080p MP4s (i.e., quicktime trailers), and playing 1080p games. In my case the blue dots were not visible when watching DVDs or Blu-Rays. The dots go away when the 706 OSD Immediate Display is set to "OFF." The manual states that THX recommends setting this to off for optimum video performance and that not all HDMI devices will display properly with it set to "ON." I have the HDMI set to "Through" and the Zoom set to "Auto." I'm guessing that there is something wrong in the HDMI implementation on the receiver, but this is not a deal-breaker for me and hopefully there will be a fix at some point. I can still use the OSD SETUP regardless and if I want the OSD Immediate Display on during Cable TV viewing I can just turn it on. I am really enjoying this receiver... it is a huge step up from my old SONY receiver in features and sound quality.