Serpwidgets
Non-participant
What you are observing are compression artifacts. Take a look at highly compressed MPEG, AVI, WMV, etc files and you will see the same thing. Part of some compression algorithms is that they take square blocks of the image, just like that, to break down the image into progressive "layers." 
Attached is a screenshot from Blazing Saddles (Recompressed using MPEG algorithms) showing the same compression artifacts. The hand is in motion, and thus "more compressed" and thus more blocky.
Attached is a screenshot from Blazing Saddles (Recompressed using MPEG algorithms) showing the same compression artifacts. The hand is in motion, and thus "more compressed" and thus more blocky.