Mike
Im a little puzzled. there is really no good reason why AV (composite) playback to a TV should be poor.
In fact it is streaming at such high data rates it should be better than DVD
Playback is usually via this method unless you have the ( better ) option to use S-video
I have (2)

HDV camcorders which I play via component . The HD PQ is understandably great but going down to using AV isnt terrible. Before that I had ( still have ) a 3ccd panasonic ( MX 500) which as an SD camcorder was capable of very colourful clear images even via AV although I often used s-video
Its the
cable the culprit or is there a
setting on your TV menu that is the cause. ?? Sometimes a wrong setting can result in this scenario.
Im assuming the playback on the camcorders LCD is satisfactory
If so is there a setting on the camcorders AV out that is the problem??
Try capturing 5 min on the PC: is it any good?
If not it raises the question of a faulty camcorder, dirty heads( unlikely as it is new), damaged tape( unusual) .....