1080P display problems on Intel H55 based HTPC build

Update:

I finally got hold of a Blu-Ray player (Sony) to check and compare; the picture quality is simply awesome in almost every mode which I tried on the TV. No tearing, judder even in the PC mode...lol.

So to my relief the problem is NOT the TV and could be anywhere on the HTPC or it could even be the HDMI handshake between my TV and H55/I3-530 Combo.

Now to the next step of debugging...I'm thinking of adding a graphics card to see if the H55/I3-530 graphics is the culprit here.

Do you have any suggestions to choose between Nvidia and ATI with the criteria that DTS-MA & TrueHD Bit-streaming should be supported.

I've read that ATI rules the roost (as far as HTPC's goes) with the 5xxx cards but the low end 5450 cards exhibits edge distortion problems and the next higher card 5670 costs more than my motherboard..lol.

All suggestions are welcome but please keep in mind that flawless 1080P playback along with DTS-MA & TrueHD Bit-streaming and of course the best bang for the buck is the goal. Or in other words, I'm noatt a gamer to necessitate a high end video card for my HTPC.


I am also in your boat as I dont see any firmware update for WD Live to activate the DTS MA bitstreaming.
 
Update: A recent automatic driver update by Windows 7 seems to have fixed the issue to a large extend. I see that the Intel HD driver has been updated too.

There is still very little amount of jagging around the text edges if you view from 10-12 inches of the panel but none from my viewing distance of approximately 10 feet...

I may still go for an ATI video card (55 or 56 series) but will wait for couple of updates from Intel to see if I can save some money and also more importantly unnecessary power consumption.
 
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@ShakenSoul: I was fed up with this issue too but luckily for me an automatic driver update by Windows 7 (including Intel HD drivers) seems to have fixed the issue. The jagged edges (text) has come down to ignorable low levels unless you are extremely picky and view it from less than 1 feet from the TV

Not that I'm unhappy with the current picture quality from H55 chipset, I've anyways ordered an ATI HD5670 card which is expected in a few days and will report if I see any changes.
 
Ususally driver update works.With my new 5570,I cld get max resolution of 720p(my TV 1080p),with new problem,everything is OK.
 
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