Xbox 360 DVD playback

I'm very impressed with my 360 so far (using the Samsung LE32R41B) especially in HD via component- the graphics & menus look amazing in 720p but the DVD playback is awful. The dark areas are undetailed and low-res, and there are pixels everywhere.

It is not unwatchable but I expect better to be honest, quite why the machine's playback is lower quality then most £30 DVD players from Asda etc is beyond me- is there a possibility of this being updated over live to work better or are we stuck with this poor quality until the end of time?

I do have a VGA cable on the way so hopefully this will improve the picture... I'd like to hear other people's opinions on this, what do you think of the 360's DVD abilities?