I just had digital cable (Comcast) and a HDTV box - a Motorola DCT5100 - installed this past week. In my case I was able to get a very clear picture using the box's DVI output to a 13 month-old, 32 inch Sony plasma set that we use in the bedroom. It comes through as Video 3 on this TV. I wanted to use the lone set of component inputs for our DVD player, which is why I tried the DVI cable for the cable box. DVD comes through as Video 4. I am now waiting for the 70XBR, and haven't decided whether I will order another cable box for this set - depends on what it will pull in from my location OTA.
I'm certainly no expert, but have you called your cable company to make sure the DVI output is enabled on your box? I downloaded an owner's manual for my box, and there are several outputs that are labeled "not enabled - reserved for future use" or words to that effect.