I'm not sure what 32" Sony you were looking at but the W8 is an amazing TV for that size, I really can't fault it.
The problem is as everyone has said, when you go into a TV store they have it set to demo mode ie stup contrast, sharpness.. some people think ooo that's nice and bright but like you and many more it make the picture look false.
Anyway, go back to the shop, ask them to put it in different "Scene" modes and you will see a massive difference.
I have 60" Pioneer Plasma TV which is reference yet last night I watched a movie on my 32" Sony W8 and it was very good! I use the TV mainly for my gaming consoles (for which its perfect) but it is such a good all-rounder I often find myself watching TV or a movie on it.
Oh come on man... 32" is like a postage stamp, I would never choose that over a 60" Panny plasma.
