I was just at a friends house and noticed him playing Oblivion on his xbox. It looked SMOOTH. Like as smooth as my PC has ever run it. Then I noticed some blurring of his cursor when he moved fast. I realized he had his TV's '120hz' mode on. It takes the 30fps image and upconverts it to 120hz. There is some slight lag and very fast moving objects can blur (which to me is horribly annoying) but he didnt care. He prefered the smoothness. And I have to say it was smooth.
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