You should calibrate your TV for the new player before making comparisions. Black level, etc. You're not going to get "near HD quality" from DVD.. 480 interlaced lines is just that, 1/6th the rez of true HD.
Don't forget, for that "$350 difference", you're also getting SACD/DVD-A. If those aren't importantant to you, then it may be worth sending the Denon back.
Don't forget, for that "$350 difference", you're also getting SACD/DVD-A. If those aren't importantant to you, then it may be worth sending the Denon back.