Here are two fixes that worked for me.
1.: Once you have started the TV app, temporarily switch the color depth (i.e. from 32-bit to 16-bit), then switch it back to the previous setting. TV should now appear unscrambled. You have to do this everytime you start TV.
2.: Install the Beta drivers/software (version 7.6) from ATI site. This should fix the problem permanently. It did for me.