Thanks for all the responses, it's great to be on a forum with so many people trying to help.
This issue and the responses has now thrown up a load more questions for me but I'll explain the original issue first:
1. The issue appears to now be fixed although I don't really understand why. The Tivo menu on the TV now looks normal and the resolution looks ok.
2. Here's the curveball: when I was playing around unplugging cables, turning boxes off and doing resets etc I then after doing a reset on the Tivo plugged it straight into the TV and the picture was ok again (as it was before we got the AV receiver). I then routed it through the AV again and it immediately went pixelated and low resolution as before so I pulled the HDMI from the Tivo back out of the AV and plugged it straight back into the TV again and it was still pixelated?! It was as if plugging the Tivo into the AV somehow altered the settings or changed something in the Tivo box which reduced the resolution even when plugged into the TV, is that even possible?
3. To complicate things further Virgin Media TV and website was down entirely on Thursday but when it went back up again the Tivo resolution was ok. So basically I have no idea whether the issue was caused by something from Virgin's end or my end and what caused or fixed it
I have some more questions about resolution and my Tivo box raised by responses above:
1. I looked on the BBC website and it says...
So I checked the Tivo box for my model number but there is no sticker on the back and the TSN prefix on the System Info does not match any Tivo box on their website. The prefix is C68, any ideas which box this is?
Thanks again for all the responses and sorry for the elongated post.