I just rented Speed Racer today on Bluray ( My excuse is two young boys)  and noticed horrible artifacts in the red channel.  I know Bluray is generally 4:2:0 color space but this was worse than anything I've ever scene...  Even on DVD.   I'm watching on BV4 (720p) +BS3 through a Samsung P1500 via HDMI.  From a viewing distance of 10 feet I could easily count the aliased 'stairstep blocks' in the outline of the letters during the opening title sequence.  

After a little experimentation I concluded:

1.  With it's oversaturated colors and ultra sharpened images this particular title may have pushed the limit of the VC-1 codec.

2.  Upon closer observation, I noticed that visually similar Bluray titles such as Cars (AVC codec) also displayed a bit of problems with the red sampling.  Although to a much lesser degree.

I did wonder why such a great processor such as the BS3 was not more aggressive with addressing these imperfections.  I decided to switch the player to Component out and was relieved to see the issue resolved.  My guess is that the BS3 is more liberal with it's handling of the component signal than with the Digital HDMI signal.  I suppose that the issue could also have been the Samsung.  

If anyone with a BS3 can bear to rent Speed Racer on Bluray I'd be very interested if they can produce the same results.

Here is a before and after image (camera phone may have affected the color) :

I'm in the camp that Component produces a better picture than HDMI at present. HDMI is all well and good but HD broadcasting and production is still in it's infancy (in comparison to 'non-HD'). Component does a good job of hiding any 'mistakes' and issues in the source-material, while HDMI tends to bring it all through.

Michael, do you have a chance to hook up your BD Player to the projector without the BS3 in  between?

Before I sold my HD-DVD player I made a simular expirence, the BS3 does some strange things to the HD image. I noticed to areas, one was the black level and the other the sharpnes. With the HD-DVD wired to the JVC HD1 projector directly no issue at all, but with the BS3 in between the image was not that detailed in the blacks and the sharpnes was to high (as you have seen as well)

Karsten 

Don't have a projector.  However, I did get the problem to go away by switching the Samsung from 1080p to 720p.  The disc is native 1080p and my plasma is 720p.  

I think this pretty clearly indicates that despite my initial concerns, it is not a problem with the Bluray codecs.  This is a relief because I read a review of this disc that gave the picture quality a score of 100.  Now I've just got to find out if the problem is with the output of the Samsung or the BS3.