the resolution of a 4MP camera far exceeds that of any TV which a screen res of 600x480 or something supidly low. The reason why you have jaggies is simply because the image is that big with such a low res, it is nothing to do with the camera or its resolution.
As Stuartli says, you should be able to view images on your TV which are almost as good as viewing them on your monitor. You say that you are using the highest resolution settings and superfine mode, This suggests that your images are all saved as Tiffs @ +10Mb?. If this is correct are you then converting to Jpegs before making a "Picture CD"?. If so how much compression are you using?.
I make VCD/DVD slideshows using Jpeg images which are approx 3Mbs each. when viewed on my 38" widescreen TV the images are almost on a par with being viewed on my 19" TFT monitor
You state 'I put some pics taken on my 4mp canon IXUS 400 digital camera on picture cd.' I have a DV digicam and this is only 1.5mp the pictures viewed in jpg direct from camera to our 28" TV and are 'perfect'.(as is the video) Is it the case that you have transfered the pics first to cd then viewed them; is the problem, has something been lost/corrupted along the way. Perhaps someone who has the knowledge can answer!