I am in Windows 7 x64, using Chrome 22. When I view an MP4 video in the video tag, it appears blurry and low-contrast compared to the source video viewed locally in Media Player Classic.
A screen-measuring app shows that both players are displaying the video at exactly its native dimensions (400x300).
This appears to be a problem only with my installation of Chrome. The video looks perfect on other machines, Macs and PCs alike. I have tried reinstalling Chrome, disabling all extensions, uninstalling my codec pack (CCCP), and reinstalling my codec pack, all to no avail.
<video src="http://d.pr/f/Nq6a+" width="400" height="300" controls ></video>
Comparison screenshots from my end:
Video tag in jsFiddle
Media Player Classic
It's actually a video size issue. A little tricky but... try this: http://webz.ro/blurry-html5-video/