blocky shadows are caused either by too small a resolution on the dmap or too large a ground plane to catch the shadows, or a combination of the two.
Increasing the filter will soften the edges of a low-res shadow, increasing the dmap resolution will sharpen up the edges and reduce the blockiness.
Increasing the bias will not affect the blocky shadows, it will help to reduce banding or "self-shadowing".
Check out my tutorial on lights and shadows at www.halbstein.com/tutorials.htm, there's a whole section in the first tut. about depth maps