It's actually a problem with the encode.
MPEG in general hates encoding solid colors. The encode vectors used while encoding solid color scenes (animated scenes, black backgrounds, solid red) tend to look blocky when being viewed.
The 'problem' with the FLI-2300 chip (and its family) is that it's video processing, as a side effect, ENHANCES these 'macroblocks' (aka "BIG BLOCKS") making them more visible than before on certain types of displays.
I believe high end Denon players and some Onkyo have worked around this problem, but they have not released any technical information on how. My suspicion is that they accomplished this by kicking back the total amount of signal processing done by the FLI chip.
I use an Oppo player connected to my Mitsu 55" at 1080i, and I -rarely- notice any macroblocking.
Personally, I feel people blow this issue WAY out of proportion. But that’s just my opinion.
