marconelly!:
Thing is, 640x480 is everything but 'high resolution' if you watch it on a sharp, large VGA monitor, where you can count every pixel on the screen (in that resolution).
While a very blurry picture will obscure any trait, both intended detail as well as unwanted effects, increased sharpness is not the cause for pixels standing out. The actual culprit is mismatched graphic design - either too ambitious or too conservative of a gradation in shape or color for a given resolution. The degree of fineness in a resolution determines the degree of change an image can have before pixel boundaries become annoying, and a break in this consistency resulting from a mismatch causes blockiness at that space and is referred to as pixelation.
Older games with digitized graphics, like the early Mortal Kombats and full-motion-video games for the SEGA CD, are at times examples of too ambitious gradation. Because digitizing involves sampling high-detail source pictures and scaling them into lower resolutions, there'll be pixelation from areas trying to represent too steep of a change in detail for the available space (This was also sometimes caused by a limited color pallete - just another form of mismatch.)
A 2D fighter from Capcom in Dreamcast VGA is an example of a too-conservative design mismatch. Dreamcast VGA is 640x480, but the graphics for Capcom's 2D fighters were originally conceived at a lower res. To scale the discrepency, the graphics just get blown up to the higher res... not redrawn at the new level of detail to naturally take advantage of the extra smoothness afforded. So, blockiness occurs with pixels where the inflated image doesn't curve as much as it could.
However, it's entirely possible to match gradations in an image's color and shape correctly to a resolution... any resolution, and certainly one as robust as 640x480... even on a big and sharp monitor. In fact, most Dreamcast games handle this just fine, such as the Guilty Gear X games (if you've ever been fortunate enough to see their jaw-dropping display on a monitor.) Unlike Capcom's 2D fighters, this 2D spectacle was actually conceived for 640x480, and the graphics are just as smooth as a drawing in a comic book dancing around the screen in crystal-clear native Dreamcast VGA. You certainly wouldn't be able to "count every pixel", much less be aware of them. The clarity would only be making the visuals that much slicker.
Also, of course, common sense tells us to sit back the appropriate distance from a screen proportional to its size, as must be done with a TV the same as with a monitor. That might also solve some of these misconceived problems.
It's like the old emulated games from SNES and Genesis that ran in 320x200 and look blocky as all hell if you play them on emulators without any additional filters enabled,
I've played the 16-bit Sonic the Hedgehog in the SEGA Smash Pack on my Dreamcast VGA, and it wasn't blocky looking. Actually, looked amazing with the crisp detail. Those emulators you were seeing might have inflated the lower-res graphics for a higher-res screen resulting in pixelation, or you also might have been sitting closer than recommended for the monitor.
while they still look reasonably fine and more natural on a TV screen due to slight pixel blurring and color bleeding.
Controlled and purposeful pixel/color blending is great for some anti-alaising and filtering effects because the programmer is properly taking advantage of the inevitable trade-off. But TV blurring/bleeding, resulting from its own inadequacy, trades away enough good detail until the picture looks like it's been put through a washing machine for far too many cycles.