Over the Air HDTV (with rabbit ears) is significantly "better" than DirecTV.
DirecTV uses about 30% lower data rate in the MPEG-2 stream at 720p than the full spec calls for.
Comcast uses even less bitrate than that but also have some stations in 1080i (which is worse than 720p). Comcast also compresses the "local" stations so you are better off switching to rabbit ears to watch football on local stations/news.
Blu-Ray is typically 1080p - the ultimate in resolution right now.
Yes - Blu-ray wins the resolution war. I've been schooled about DVD up-converts - apparently thats a myth and the studios resample the film to put movies on Blu-Ray so it really is better than a DVD of the same movie.
"I can't distinguish between Apple TV and Blu Ray quality."
Perhaps you need glasses, or a better IQ TV? It's easy to see how blocky AppleTV is.
AppleTV is the worst resolution of them all - it puts out a 720p or 1080i signal, but the movies/podcasts etc, are upconverted from dvd - 1/4 1080p, unless purchased, then 720p is avail.
http://www.apple.com/appletv/specs.html
MPEG-4 at 720 by 432 (DVD resolution)
h.264 at 960 by 540 (1/4 1080p)
Purchased iTunes content at 720p.
"I'm not seeing the same leap from hdtv broadcasts to upscaled DVD"
And your not going to see much.
normal TV is 480i - or 240 real lines of resolution with noise.
DVDs are 480p (or at least are recorded as such) and have 480 real lines of resolution. Its a HUGE jump - 4x the resolution.
with 480 lines - its not too hard to interpolate and get the DVD up to 720p or higher and have it look spectacular.
direcTV is lower than broadcast quality 720p - (that is 720p with a reduced bitrate) - so its going to look a bit better than upconverted DVD quality.
BLu-Ray is 1080p - which is only 19mb-ish - compared to 720p's 13-16mb-ish isn't all that different. You pretty much need a high-end 60" set and to sit 10-15 feet from the set to really get 1080p's effect fully.
As Torpid intimated below - DirecTV is mostly MPEG-4 stuff now which is better at a lower bitrate than MPEG-2, I'm behind the times
