Viewing SD is a different effect. The 480 signal is being scaled up to 768. That up-scaling can cause blockiness, and if you view that from too close, you will likely see a blocky AND pixellated picture. The result of all the processing ranges from "still pretty darn good" to "yikes, that sucks", depending on the input signal, the quality of the upconversion electronics (in the set-top box/receiver/display/etc), the viewing distance to the screen, and your personal tolerance. Using any of the zoom modes to eliminate the 4:3 black bars can also have a huge effect on the picture.
I have found the best way to get the kids to back-up from the screen is to blast them with the 110 watts from my 5.1 sound system...
(just kidding!)
