In terms of resolution both the web player and the desktop player (Windows) support a maximum of 1080i, or 1920 x 544 I think they display it as.
If you choose the "Best/HD" option in the web player you will get this - 1080i - unless your cable/satellite box is outputting 720p in which case you will get that instead. The web player will remember this setting for next time you connect.
The desktop player has some extra options if you want to stick to a fixed bandwidth - you set the bandwidth and then you can tune I frame intervals and various bits and pieces, whereas the web player only does these things automatically (the equivalent of choosing the Auto setting in the desktop player I imagine).
I don't think there is much else you can do. The fundamental problem is the streaming system has to adapt on-the-fly to the available bandwidth and as such I have a feeling they have opted for compression that maybe suits lower bandwidths more than it does higher ones. That's just my feeling though, but as I mentioned in another thread, my view is that the on-screen results for high bandwidths look a bit worse than I believe they should be.
In fairness, they're not really targeting Slingboxes to a "videophile" audience (not that I would class myself as that) - more for people on the go watching on lightweight devices.
That said, I think a little boost to the HD quality wouldnt go amiss and would be appreciated by people connecting their computers or connected devices up to TVs...
If you set it to 720p then it'll stream 720p instead. Try it and see if you notice any difference.
However, some cable boxes aren't great at downscaling to 720p so it might lose a little quality even before the streaming is sent.
Apparently UK Sky boxes are like that, though when I tried switching to 720p it wasn't something I noticed.