Any ideas on how to emulate this look (purposely bad looking video)?

so i'm doing a very short sequence right now, and i thought it would be kind of interesting to have this short sequence have the same characteristics of the video quality of the old early 90s Sega CD based FMV games (for an example, i uploaded a short clip here: http://www.sendspace.com/file/ro17qv ). and there is a LITTLE bit more of a technological explanation here ( http://en.wikipedia.org/wiki/FMV_game#Description ) in the 3rd paragraph. from reading from here ( http://en.wikipedia.org/wiki/Sega_cd#Reception ) it would seem the video quality may have been better, natively on the disc, but the system itself could not actually interpret that quality of video. (i had alwasy just assuned it was compression artifacts to cram a 90 minute full motion game onto a proprietary 500mb cd-rom disc... but that may still have something to do with it) or maybe they just encoded the video liek that, knowing the console couldnt do it anyway, and being more mindful of bit-budgeting.
so, is there anyway to really emulate that look? i tried encodeing a simple mpeg at 1 mbps, but it just made it more pixelated... didnt quite give it the grainy factor, charecterisic of dithering (which i was looking to see if there was just a simple color dither filter where i could limit it to the sega cd color threshold, but no luck on my part), nore the washed out colors i was looking for. i tried adding some noise... but then the grain was just random. where as in the games, the grain was more stagnate. (ie, the camera may pan, but you could still see the grain in the exact same place on the screen)
or is this just something that was inherent to the hardware, and no real way to fully emulate it without said hardware?

I'd experiment with Posterize Time to get the low-frame rate look; seems that most of the CD-ROM games with video had frame rates of around 10-12 fps. Posterize Time will let you achieve that pretty easily.
Instead of Noise, try Mosaic with the block count sent relatively high. Use Posterize to create the color banding. You might have to experiment with the order of the effects, and also the level to which they are applied. A color correction effect as the last step would be necessary to get the desaturation you're probably looking for.
Another quick-and-dirty way would be to export your sequence using Microsoft AVI as your Format, with Microsoft Video 1 or Microsoft RLE as your codec. For MS Video 1, click Codec Settings and turn the "Temporal Quality Ratio" down a bit, and for both codecs, decrease the Quality slider. Set your export frame rate to something that is 1/2 to 1/3 of your original sequence frame rate. That should create a pretty schmeggy looking file Again, mix-and-match to get your desired look, but this might be the easiest way to do this--these videos would have used codecs like this (Cinepak was popular, too).

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