Didn't see it as we were tidying up after our son's birthday party.
Downloading it now though so I'll see it tomorrow evening, probably.
As for HD - rendering FX to a higher standard makes it disproportionately expensive to do any fantasy show in HD compared, say, to Eastenders or a good wildlife show. The Doctor Who production team held out for as long as they could because they were worried that the net effect would be a lower quality production. The Beeb was reluctant to give them the extra cash they needed in order to do it to what RT Davies considered an acceptable standard. If the BBC is so reticent to properly fund its most successful non-soap drama in HD, I can't see them loosening the purse strings for Merlin, especially during a recession.
I guess if it gets a 3rd series next year it probably will go HD then, because the Beeb has a target to eventually get all its in-house and commissioned material made in HD.