I'm running iTunes version 8.0.2, which isn't the latest and I'm downloading and playing HD TV shows just fine (other than the longer downloads.) This is on a mid-2007 MBP 2.2
I know there was an update after I got the HD capable version, but I haven't updated since. What is the version you're using? Also, are you downloading both versions (SD and HD?) The reason I ask is... I often will pause the download on the SD version until some later time, and just get the HD version. If your playback prefs have the "Play videos using standard definition version" checked, maybe they can't see the HD download. Anyway, that's all I can figure out, other than try to download the update again, and re-install it. Maybe something got corrupted.