When films are transferred to video in preparation for DVD encoding, they are commonly run through digital processes that attempt to clean up the picture. These processes include digital video noise reduction (DVNR) and image enhancement. Enhancement increases contrast (similar to the effect of the sharpen or unsharp mask filters in PhotoShop), but can tend to overdo areas of transition between light and dark or different colors, causing a chiseled look or a ringing effect like the halos you see around streetlights when driving in the rain....Edge enhancement on DVD's often can be seen around objects such as people's faces or buildings or lamps and once noticed is very distracting.
Video noise reduction is a good thing, when done well, since it can remove scratches, spots, and other defects from the original film. Enhancement, which is rarely done well, is a bad thing. The video may look sharper and clearer to the casual observer, but fine tonal details of the original picture are altered and lost. Most people generally do not notice edge enhancement but once pointed out it can ruin the film experience for you, the larger and more detailed your display the more chance you will notice it.
Note that ringing can also be caused by the player and by the TV. Scan velocity modulation (SVM), for example, causes ringing.
Edge enhancement is generally added to make films look sharper on small screen televisions....Now that televisions sizes of 40inch and above are on the market we should start to see less and less of this annoyance which is especially bad for those with projection systems.
There should be NO edge enhancement on high definition HD DVD or Blu-Ray titles but unfortunately there often is as the master print used can contain it.....This is why older films can contain more than newer films but is not always the case....As an example 2001 - A Space Odyssey on HD DVD and Blu-Ray contains NO edge enhancement.....Don't accept it and if you see it then complain to the company that released the film.
Hope this Guide helps someone.