It isn't so much edges; the whole image looks like it's breaking up, if you move (pan) the camcorder around too fast.
If you want good quality you have to hold it steadily and pan it around slowly.
I am suprised most of the reviews didn't pick this up. Apparently it is caused by the image sensor; it scans one line at a time, whereas a high-end progressive (non-interlaced) cam (or the old DV ones, if supporting progressive mode) captures the whole image in one instant, so you don't get movement within the image.
This isn't related to DV though.
Interesting about the video card in the demo box. Is this running under XP? The data rate isn't that high; it's the Windoze bloatware that needs a fast PC.