I've perceived the same thing as OP, I have Nintendo's official first party component cables.
My TV is a Panasonic Viera.
First thing I noticed when putting the image in 480p is that the image looks barely better respect 480i, in fact in 480i everything looks more rounded, with 480p everything looks more jagged. It's pretty obvious on System Menu.
During gameplay the difference is big, for example with Zelda TP, with 480p the game looks super detailed, no blurry at all, more crisp, but the HUD looks pretty jagged, with 480i it looks pretty blurry.
So, I think that the TV itself could be displaying the image in 480p already, without need of Wii settings (at least on Wii Menu), during gameplay maybe it can't be forced to run 480p at least the Wii System say so.
In short, some games/menu looks better under 480i, while others don't.
Also how a can be a progresive setting from the Wii be different from a progresive setting coming from the TV?
@OP
Try toying whit the sharpness level of your TV, if you're getting a too blurry image turn up the sharpness level.
My TV is a Panasonic Viera.
First thing I noticed when putting the image in 480p is that the image looks barely better respect 480i, in fact in 480i everything looks more rounded, with 480p everything looks more jagged. It's pretty obvious on System Menu.
During gameplay the difference is big, for example with Zelda TP, with 480p the game looks super detailed, no blurry at all, more crisp, but the HUD looks pretty jagged, with 480i it looks pretty blurry.
So, I think that the TV itself could be displaying the image in 480p already, without need of Wii settings (at least on Wii Menu), during gameplay maybe it can't be forced to run 480p at least the Wii System say so.
In short, some games/menu looks better under 480i, while others don't.
Also how a can be a progresive setting from the Wii be different from a progresive setting coming from the TV?
@OP
Try toying whit the sharpness level of your TV, if you're getting a too blurry image turn up the sharpness level.