If I remember correctly with my old Slingbox Pro and Solo, they down converted any high definition source to standard definition 640×480 resolution or lower depending on the bandwith. Whereas the Slingbox Pro-HD will broadcast up to 1920x540 as long as it can sustain a 1.5Mbps stream from end to end. This means from where the Slingbox is located it must be able to sustain an upload speed of 1.5Mbps and where the Slingplayer is receiving needs to be able to download at 1.5Mbps. If you're using the Slingplayer over a heavily encrpted VPN, that can also cause the Slingplayer to question the quality of the connection.
I just used a Speedstream.net to test my location from Austin (USA) to Aberdeen (UK), the results were 4.64 Mbps download and 0.56 Mbps upload. This means, I could probably watch someone's Slingbox Pro-HD in Abereen in full HD but my Slingbox wouldn't be able to host a HD stream.
You can try to manually adjust the steam and see if you can fine tune your settings to suit your needs. It can be adjsted from the Encode tab from the SlingPlayer application, from the Slingplayer PC command bar | Settings | SlingPlayer Options... | Encode Tab