Actually, it turns out mine was set to smooth streaming by default. Progressive definitely gives better quality.
It's possible that the smooth streaming version would get better if I watch for several minutes (I seem to remember that from back when you guys were experimenting with smooth streaming). I think it has something to do with the high ping between me and the streaming server (because I'm in Japan) causing it to start at low bandwidth. My connection speed shouldn't be the issue, as I've got 160Mbps.
Larger video players across the board would definitely be welcome. With content like this I don't always need to have it full screen (but just in a window off to the side while I'm also doing other things), but the current video player on the site is a bit too small (so I usually end up downloading the video and watching it in a WMP window).