What could be the problem is that because iDVD can't create a dvd with a pixel ratio greater than 720 x 480.  It doesn't matter if you play it on a blu ray player or HDTV, it's never going to be larger than 720x480.  That's really tiny in comparison to even a 3.1 mp image which is somewhere around 2048 × 1536.  You have a few options; 
1) probably the cheapest.  Hook your mac up to your HDTV and watch it that way.  If you have a laptop it will be very easy.
2) blu ray burner and roxio's Toast program.  To burn a blu ray disk that has a higher resolution
3) an apple TV or PS3 or Xbox, any other sort of set top box that can play high def content without needing a disk.  
That's about it for your options to get a better picture.  It really has nothing to do with how great the quality of the original image.  It's a limitation of the device you're watching it on.