Please help, hideous HDMI/DVI confusion

Hi,

I recently bought a Sapphire HD 4850 Toxic. Installed the card, installed latest drivers, insalled ATI HDMI Audio driver, all good and well. Now I'm trying to connect my computer to my TV which has an HDMI port. The TV is a Goodmans LD3265D2 and according to the manual supports the following resolutions:

720P @ 50 Hz
720P @ 60 Hz
1080I @ 50 Hz
1080I @ 60 Hz
1080P @ 50 Hz
1080P @ 60 Hz
1080P @ 24 Hz

I'm using the DVI-HDMI Adapter that came with the graphics card and an HDMI cable I bought from a store in Tottenham Court Road.

I've tried what seems like every permutation of the settings (refresh rate, resolution, colour depth) in the ATI Catalyst Control Center but I can't seem to get a good clear picture at any resolution except for 800x600. The picture is almost always fuzzy or noisy, quite often I've noticed that the picture fluctuates between being somewhat clear to getting progressively fuzzier, progressively noisier, progressively more artifacts and then seems to cycle back to being somewhat clearer and then cycles back to being fuzzy, etc.

Originally I thought the issue might be the quality of my HDMI Cable (it's a very long 10m cable), but doesn't the fact that I can get a clear picture at 800x600 mean that the cable is probably fine?

The second problem is that even at 800x600 I still get no sound whatsoever. It was my understanding that if I was using the supplied adapter then ATI cards with built in sound chips can transmit audio over HDMI. Having looked at the adapter I notice that some of the pins on the DVI side seem to be missing, the adapter has two squares of 9pins, seperated by a space where there could be six more pins and then a flat long pin at the end- sorry I would post a picture if I had a camera. Does this mean that this adapter only carries video and not audio? Do I have to change some settings in windows to get the audio output through the ATI card? In my device manager I have an ATI Sound Device, but it doesn't come up as a choice for the sound output device in Windows (I'm running XP).

Any advice would be most appreciated....tearing out my hair.

Thanks,