Sit further away, the pixellation 'blends' together. I have a 42" Philips and at 3.5 to 4m the DSTV "quality" is OK. At 1080p I can see the detail even 20cm away.
From what I remember (too lazy to go check ), on the TV you have:
Normal: to view 4:3 ratio pictures, so you will have black bars to the left and right
Panorama: takes a 4:3 picture and stretches it to fit to entire screen (not an even stretch though, the center of picture is not stretched while the sides are "severely" stretched)
Full: to view 16:9 ratio pictures, if you input a 4:3 picture it will get stretched evenly to fill the entire screen
Zoom: zooms in on a 4:3 picture so full screen is filled, but no stretching, the top and bottom of the picture gets cut off