[quote name='mtxbass1']The only thing I can think of would be that you might have something wonky with the upscaler settings, or the video output format settings.
Do DVD's look "blocky" as well?
Which Blu-ray is giving you problems? It could very well be that specific movie...
Edit: For reference, here are my settings. This works well on my Samsung 1080p TV, my Samsung 720p in the bedroom, as well as my Panasonic 1080p projector in the home theater.
BD/DVD Cinema Conversion: Automatic
DVD Wide Display: LetterBox
BD/DVD Upscaler: Normal
BD/DVD Video Output Format(HDMI) Y Pb/Cb Pr/Cr
BD 1080p 24 Hz Output (HDMI): Automatic
BD/DVD Dynamic Range Control: Off
BD/DVD Audio Output Format(HDMI) Linear PCM
BD Audio Output Format (Optical Digital) Bitstream
Under display settings, I've got these settings.
Cross Color Reduction Filter: Off
RGB Full Range (HDMI): Limited
Y Pb/Cb Pr/Cr Super-White(HDMI): On[/quote]
Same settings as I have

What should I change with the upscale setting and video output format?
Every bluray I try looks the same way (Planet Earth, March of the Penguins, The Departed). DVDs look the same way, but a little worse.
And to clarify, I would say the picture does look "grainy", like someone said a couple posts above.