i have the Eyetv 250 plus that I've been using several weeks now. I use it to play my PS3 on my 15" MBP. The video quality is pretty fuzzy as well and I haven't found any features or settings to change this. I think it is just the way it is. If anyone has any ideas my ears are open.
Use an S-Video cable instead of Composite, and check your settings- the de-interlacing should be set to "Progressive Scan" and the quality should be set to "Best (720x480)" - this gets me about the same quality as on any TV.
Oh okay cool. I'll give that a shot. But how will I connect my Wii to it via S-Video. I see the S-Video input on the EyeTv Hybrid but my Wii only came with composite cables.