The horizontal line is just a part of the tube's construction. I can't remember the specifics, and I'm definitely no expert in the matter, but it's definitely normal and you'll eventually look right past it.
I remember getting mine and thinking the exact same thing. Even contacted the person I bought it from thinking it had a problem. Now, the line doesn't bother me in the least. If I'm working in word/solidworks/multisim/etc., I can see it. But when I'm watching a video or gaming, it's literally invisible.
Regarding the blurriness, is it just out of focus or can you actually see the red and blue out of alignment? Again, no expert here, but convergence should fix color alignment, but not blurriness. However, I read a short while back about a focusing pots being accessible through the top of the case. Google FW900 focusing pots. Lots of info to be had there.
Now for my own question. Anyone know where to get some good quality DVI to BNC cables? The best I've found so far is pccables.com, and I'll likely end up going that route, unless someone suggests otherwise. Thanks!