There is a very good reason behind this, to get any sort of quality from a Sky+ box on a 37" HD TV, you will need to connect the box via HDMI to the TV, then you should get better all round pictures, and even moreso on the HD channels, at the moment the connection is SD
Oh and welcome to the forum, enjoy your stay
Sorry I should probably expand:
TV to Surround Sound - HDMI for watching movies and Digital Audio Optical lead for sound back to the Surround Sound from the TV
Sky+ to TV - HDMI - to enjoy the full surround sound on channels/programs that support it and to get a full HD picture
DVD to TV - Scart
that should do it