Most dual layer BD's run between 30 and 40Gb. Of that I'd expect (but haven't checked) that the main feature would run between 25 and 35 Gb. These are all 1920x1080 transfers. The legal downloads that I'm aware of are 1280x720 (which is less than 1/2 the number of pixels, and are under 9Gb. While I'm sure some of these look quite good, there is no way they can compress that much without losing detail. On my system (1920x1080 projector), I can easily see the difference between a 1080 image and a 720 image, if the 1080 is sharp. Even after downrezzing to the 720p mid-def movies, compressing to 9G or less will cause artifacting that you won't (or at least shouldn't) find with a good BD disk. Those artifacts include posterization and macroblocking amongst others.
Grain may also be filtered out to make the 720 movie easier to compress. Some might think that is a bonus. I'd rather the transfer was true to the original than filtered.
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