How to improve poor video quality in iMovie?

I have a movie in iTunes (version 10.6.3). When I play the video, the quality is good on my Mac, on my iPad 3 and on my Apple TV. The Apple TV is hooked to a 42-inch LCD TV.
Next, I open the video file (MP4) using QuickTime Player. I use the Edit and Trim commands to create a 1-minute segment from the video. I save the segment from Quick Time Player. The saved segment is a MOV file. I drag and drop the MOV file back into iTunes. When I play it from iTunes, the quality still is good on all my Apple devices - no noticeable difference from the original.
Now, I import the MOV segment into iMovie 11 (version 9.0.8). At import, I tick the Optimize Video check box and I select the Full - Original Size setting. Once imported, I select Share > Publish To iTunes. I do not make any changes to the video clip in iMovie. I publish to iTunes using all five size settings: Mobile, Medium, Large, HD 720p and HD 1080p. Once in iTunes, I play the video again. Now the quality is poor, lots of pixelation in all five size settings.
iMovie appears to be doing something to the video to degrade its quality. Maybe I have a setting wrong somewhere. Anyone have any suggestions on how to prevent the degradation in video quality? Thx

Hey Brad, the MP4 movie in iTunes is 806 MB. The segment I trimmed in QuickTime Player and saved as an MOV file is 18 MB.
When I export the MOV segment from QuickTime Player to my desktop, the export format options that appear are: Movie; 480p; 720p; and iPad, iPhone 4 & Apple TV. Which do you recommend?
When I do Share > Export Using Quicktime in iMovie, there are a bunch of Export and Use options. Which do you recomend?
Thx

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