How do I get HD channels working smoothly?

You need to increase the buffer size of the input stream. This will have the unfortunate side effect of increasing the time to change channels and hence not included by default.

The easiest way to increase the buffer size is to write these 3 lines to ~/.me-tv/xine.config (if it does not exist create a new file),

video.output.xv_deinterlace_method=linearblend
engine.buffers.audio_num_buffers:500
engine.buffers.video_num_buffers:1000

You may need to tweak these numbers depending on your setup.