Did you actually put an HD-DVD in? The difference is like night and day. I can only suggest your setup was incorrect.
If you only watched the free included film 300 then you will not see true HD, as the film had 'grain' added deliberately - as the Director intended.
Watching HD-DVDs like Transformers, The Bourne series, Batman Begins, Serenity, The Prestige etc offer a better picture than the cinema.
The picture is miles better, infact breathtaking with certains films.