I have noticed that on my Droid Pro, which has a 320x480 resolution, that the video quality is extremely jagged. To be clear, this isn't a fuzzy, compression, low-bandwidth issue, but what I am assuming is a video-downscaling issue. The frame rate is smooth. I have tested the quality on the same set-up with a Nexus One (480x800) which looked more "native." For photoshop junkies out there, if I remember the setting correctly, it looks like resizing using "nearest neighbor" versus bi-cubic.
Now, I'm very aware that video in general is going to look better at a higher resolution, but watching MP4 640x360 content from my SD card looks perfectly scaled on the 320x480 on screen, which again makes me think that the slingbox app was only developed for larger screens. If there is no fix for this, what are the chances of getting an update for the app that addresses this?