Try putting the setting of your TV's sharpness and contrast down to see if that has any effect. It is also possible that the brightness setting of your CRT is set too high. You can get everything set up correctly using one of those calibration DVD's. On my computer I've also noticed that not working at the correct gamma level does tend to heighten the visibility of MPEG compression artifacts.
You might be viewing the natural grain of the film on DVD, which is normal. Some reference quality DVD's to try out are Gladiator and the Star Wars Trilogy (NOT episodes I or II, as they only have average video quality). These are about as good as DVD can look.
You might be sitting too close to your screen. For large screens (40 inches +), you should sit at least 10 feet away when viewing standard definition sources, and around half that distance when viewing high definition sources.