OK...after getting mine upgraded (piece of cake), I spent a little time watching a movie and using DVE and a few test discs. The first thing I checked was BTB. I have a Sanyo PLV-Z2 LCD projector and connect my S97 to it via HDMI/DVI. I used to have to set my S97 brightness to +1 to get perfect BTB using DVE. Now it is perfect at 0. Dead on!
I also ran a few test discs again looking at the 3-2 Cadence, Video Flags (Galaxy Quest trailer, More Tales of the City intro, and the Faroudja test disc/diagonally moving boxes/lines). The player passes the test easily. I can see this by using the player's on screen menus while running these video tests. Any time you press a menu button or move around in the on-screen menus, the player will hop out into video mode....then very quickly (hard to even discern), the Faroujda 2310 analyzes the video again and grabs the 3:2 pulldown. Superb. I was running in Auto2 mode, like I normally do...this seems best. The player still does fail the Incorrect Progressive Flag test as it did before in Auto2 mode (so they didn't fix that yet). No biggie, as this is a disc mastering problem that is rare anyway.
As far as macroblocking goes, I really didn't have any to begin with on my display, and I still don't see any, so no comment here.
I am now running in 720p, HDMI, Normal Picture mode with all settings flat (= 0), including Brightness, Contrast, etc. I don't have any MPEG DNR settings enabled (all 0). Excellent.
I have also noticed that the player is much more responsive when moving around in the menus. I never had to wait for anything. Nice.
I have yet to check out Layer Change improvements...