Welcome to Audioholics. I'm not sure about your satellite connection, maybe someone else can speak to that. As to the DVDs you mention, they're fine.
War of the Worlds, Minority Report, Battlestar Galactica, etc. are examples of DVDs where the director purposely made them grainy and the colors washed out. It's not your set and equipment. This can be testified that Star Wars looks great. If you have a copy, try The Fifth Element. Its a demo quality CD to test visuals and audio.