I noticed the grey blacks straight away when I wanted to rent a movie on Zune with the new dashboard.
There is a way to get around it on displays wich use standard video reference levels (black at 16).
Set the 360 HDMI color space to RGB and set expanded reference levels. Games and the dashboard won't display properly (blacks are cut off and the picture is too dark) but when you play a movie it will be in the correct range of 16-240.
If not the movies are displayed in 32-224 range, greyer blacks and generally crushed color.
You'll have to switch back and forth between games and video content.
There is currently no way to get movies in full RGB 0-255 range for pc monitors, at least not with HDMI output.
DVD playback through the HD-DVD drive is unaffected luckily. (yay it's still good for something, quiet dvd playback). Sucks though the HD-DVD drive is tucked away under my apps now. I could not find it at first.
Talking about comments on Eurogamer, this one is pretty worrying
"@Zerobob You're correct that video output is no longer pixel to pixel. With the old dashboard, you could play a 1080p resolution chart (search for "AVS 709" to find good calibration videos) and while there was some notable issues, it mostly seemed to pass the full resolution (whereas the 360's picture viewer has always downscaled, which was obvious with a 1080p resolution chart). The new dashboard very clearly seems to be downscaling below 1080p for playback. Worse, if you display a single-pixel checkerboard in Windows Media Center now, you get some bizarre color banding, so neither that nor the dashboard's video player seem to fully display 1080p files anymore."
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