Sharp LC32GA6E and X360

I've recently bought this 32" HDTV and have enjoyed playing all my games on it and they look really nice but I have recently began downloading film trailers from the marketplace. Although these are 720p they appear no different as if I were to watch a DVD on my X360, particularly in terms of the crackliness particularly in black areas of the screen. Theres almost no options available for me to alter, is it meant to be like this or not?