sounds to me like poor bitrates by Virgin on their channels and such a huge screen magnifies the macroblocking and pixelation
macroblocking is on all digital broadcast too some extent - more so because the TV (when not watching HD) has to upscale the SD 720x576 content up to 1366x720 or 1920x1080 and this is where the picture quality gets worse - with low bitrates this will be even worse, ITV football is the worst for it, you notice squares (macroblocks) around moving players, and pitch instead of varying green is usually same green throughout , tickertape on cup winning endings you just see a sea of coloured squares and ITV frantically switching cameras to try and hide it (mind the world cup wasnt too bad, maybe they upped the bitrate but last year and before was terrible) - this is how digital codecs work they render the frame using parts of previous frames - the lower the bitrate the less changes are made and pic quality gets poor
this type of thing is less noticeable on older CRT sets (big huge TV's with glass screen) due to the way they display and dont upscale
the best thing you can do is...
1. connect all devices by HDMI as these are immune to interference problems like every other connection (scart, Svideo, component, composite etc) and will offer a 'cleaner' picture, it will also allow the device connected to upscale rather than the TV if it outputs at 720p or 1080p and may do a better job..if not just set to 576p in settings and TV will upscale - devices like DVD player, bluray, etc - dont fall for the £30 HDMI cable is better than £2 cable cos its BULL - only build quality is different and unless you plan to yank the cable in and out thousands of times then cheap one will do - they sell em saying "shielded from interference" but the truth is digital doesnt work like analogue and interference doesnt affect it in same way and signal gets through 100%, get a £3 cable from local cheap shop or ebuyer.com
2. consider getting Virgin HD and Blu-Ray player (or HDMI DVD Player 1080p) as the virgin HD unit and Blu-Ray might do better job at upscaling the SD content and u will get HD content which is perfect, when i had SKY the SD was crap through scart to LCD, then i got SKY+HD on HDMI and the pic on SD content was brill compared to before, same bitrates just better processing (ITV football wasnt void of it though)
3. mess around with picture settings, lower the colours a bit as sometimes people have the colours too rich and bleeding occurs and make it look less sharp and also makes "waxy" faces - shops have TV's in store mode and does this rich bright mode so customers get attracted to the sets and when they get home they sometimes put them in similar picture mode called "vivid" which has colour and brightness way up - reduce colour a bit and brightness a little and some people like to reduce sharpness as it helps blend the discrepencys
4. sit further back, there are proper seating distances to screen size ratio, this should have been consulted before you bought the TV - too close and you see discrepencys and get poor pic quality, too far away and HD and SD are the same... the bigger the screen the further away - the distance for 50" is at least 6ft 6" to 9ft 6" - but all this changes depending on your screen resolution too, if its lower then its further away - if your sitting close than 6.5ft then your too close
hope this helps