Why is the iDVD-burned CD of worse quality than the raw quicktime movie?

Hello,
I have digitzed some old VHS movie to quicktime using a simple USB video grabber. The quicktime movie that I got is of good quality. Then I have imported to iMovie, made the editing, finalized the movie, and shared to iDVD. The encoding is set to best performance, the format is PAL, 4:3, and then I have burned the DVD. When I look at the DVD on our TV the dark parts are really awful - digitizing noise all over the place.
I then connected the computer directly to the TV and this is much better in quality . the background has no or little flicker, and the dark parts remain dark.
What am I doing wrong? I refuse to beleive that this is as good as it gets - commercial DVDs are much better and this is from a €%&/# VHS, so there should not be any real degradation?!?

anderssunesson wrote:
When I inspected on a huge flatscreen it turns out that
-all the iDVD movies have TERRIBLE pixellation
Clearly when you look at a 720 x 576 DVD on a 42" LCD it will not look good unless you have good source footage AND a good encoder AND good upscaling from your player. iDVD does provide a good encoder but the other two may just not be up to the task.
I personally made DVDs that looked good on a 42" Sony TV. But they were encoded in Compressor and played on a Blu-Ray player with excellent upscaling.
anderssunesson wrote:
How can I burn the mpeg-4 to a DVD without incurring the loss in quality? How do studios do this?
You can't and they don't. First of, studios don't start out with highly compressed videos and secondly they have much better software encoders (which cost $$$$) like CinemaCraft or hardware encoders.
anderssunesson wrote:
There were some tips on round pixels vs square pixels. I will look into that. Do you need a special "DVD-digitizer" to save your old VHS movies??
You can get something that goes from VHS to DV (instead of MPEG-4) like the Canopus converters and then edit in either iMovie 6 or FCE (both are EOL). In any case, bear in mind that you start out from VHS.

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