Anyone ever had blocks in their video?

For those of you who have helped me in the past -- thanks, and you know I am slowly getting familiar with PrPro CS4, but I'd ask your indulgence again with this novice question!
I am doing a highlight video and the raw footage is from a Sony HD camcorder -- when I put it into my video timeline (or when I preview it), it come out with blocks...almost like pixelated...it's doesn't ruin the video by any means...but it does degrade the quality -- I know this is potentially one of those "open a can of worms" becuase it could be so many different things, but I was wondering if anyone had a good "quick and dirty" about resolution...if in fact...that may be the problem (ie -- am I using the wrong project settings somehow, or...do you just NEVER resize video...??)
Thanks!
opusf15

Downrezzing is OK, uprezzing is bad.
HD from a Sony can be many things, HDV, AVCHD, XDCAM-EX, XDCAM HD, or other formats. So what is it?
What are your sequence settings on what OS with what version and how do you judge quality, on a properly calibrated external monitotr? What have you done to your clips, what effects, transitions, scaling, etc.?

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