I've had this problem since before iTunes 7.
Whenever I play TV Shows I purchased off iTunes I see what I believe is called an interlacing problem. For example, when I watch mouths (whatever in the scene moves continuously) in The Avatar I see what I can best describe as horizontal lines that don't line up correctly making part of the moving image looks our of place.
Of course I am using a 21' Widescreen Dell LCD so maybe that has something to do with it. Also I have an ATI 850XL 256MB graphics card. If anyone has any suggestions, or knows why it may be doing this please reply.