Poor Blu-Ray Quality on Home Theater System

Currently, I am using an Onkyo TX-Sr606, Sony BDP-S350, and a Samsung LN-T4066F for my home theater system. All components are connected using HDMI cables from Cables2Go (found on newegg). I did the setup for each component as per the manual instructions before firing her up and putting in Planet Earth on Blu-Ray. You could notice serious pixelation, especially on the darker shots, and also close up to the TV. There was occasional blinking on light shots, for example, the arctic snow.

I tried Dark Knight. Same thing. I reset all system to factory default, replaced HDMI cables, did the setup again, and am still having the same issue. Any suggestions on where to troubleshoot from here?

Currently, all system settings are restored to factory default so I can start from scratch with your guidance.

Your display needs to be calibrated. Factory default settings on displays are best described a horrible.

Get a good calibration disc, either DVD or bluray, and follow the instructions to the letter. Turn off most of the auto picture settings in the display first, since they tend to defeat calibration adjustments.