I"ve just wasted a couple of hours trying to fix this, so I thought I"d post it here for info…
I received my Pi a few days ago, downloaded the Debian Squeeze ISO, plugged it into my Panasonic 1080p TV via HDMI and got the board booted pretty quickly. The resolution was something weird, but it worked.
Once I started the GUI, it auto-detected a resolution of 1824x984… not ideal as the TV was overscanning everything beyond the edges of the screen. I couldn"t see the taskbar. Worse, when I rebooted, the command line was also overscanning, so it was pretty hard to log in and impossible to do anything useful.
After a few SD card re-flashes and lots of googling, I eventually got it to resort to 1920x1080 by creating a config.txt file with the line ''disable_overscan=1' in the /boot/ folder (which is the root folder when you drop the SD card into a Windows box).
However, it was still overscanning. Eventually I worked out the the TV needed to be manually told it was a 16:9 aspect ratio instead of leaving it on Auto (which has always worked before).
Hope this saves someone some time….