Sharpness of Flat Panel TV's?

Just got a new Sharp LC-26SH12U Flat Panel TV and the clarity seems slightly blurry (almost like watching a video file that was encoded not quite at optimum quality) and if I watch very closely at fast moving areas it seems as if there is some deinterlacing (i think thats the term) The lack of sharpness is most noticeable on small text on the screen.

Its only hooked up to the cable line, I have to go pick up a replacement cable box tomorrow. Is this how normal analog non HD input looks on a digital monitor? or is it the TV? I cant tell if its the TV not showing great quality, or if the TV is high enough quality that it shows all the imperfections in the analog signal that the old tube TV's that are naturally blurry and low res dont show. (I had an old Viewsonic Cable/RCA jack to Monitor adapter box a while ago, and when watching TV on a Computer monitor I remember similar quality traits)

And I assume if its the signal, that HD signals and hopefully DvD's will be much sharper?

Thanks guys.