Best format for Importing video?

When I create a new event in Imovie and import video it will give me two options, "Large 960x540" (which says it will "reduce image size with little quality loss") or "Full" (which says "selecting full on this computer may result in degraged video playback").
Here is my dilemma.
I would think Full would give me the best image quality when I create a "project" and export it.  So I tested it.  I imported the same 15 sec clip with both options.  The clips were shot from my Iphone 4s.  I put both clips in the same "project". So my project is 15 seconds of "Full" video followed by 15 seconds of the same footage in "large" format.  I "finalized" the project and then exported it to my desktop.  I actually did it two ways, one was at 720p and one was at 1080p. 
When I watch the video, it actually looks like the second half of the "project" is slightly crisper/clearer which is the part of the "project" that came from the "Large" import not the "Full" import.
Is that possible or are my eyes playing tricks on me?  I am viewing it with QTplayer and utilizing my full screen of my computer which is a 13" MBP.  Should the section of the video from the "Large" import look better than the "full" or vice versa?
Thanks,
Ehren

QuickTimeKirk,
We posted our responses about the same time.
I agree with what you're saying but he did ask for the best possible quality.
I imagine with all the reencoding between the formats the video isn't going to look that great.
As a side note, given the above scenario I've seen better quality video acquired, when the DVD Players output is connected straight to a mini DV camcorder and imported into iMovie.
That's just my experience when converting video of questionable quality to begin with.
I don't know how important it is to get the best quality but, there is a program called Cinematize that guarantes no loss in quality during the conversion process (never used it though).
Cinematize 2 for Macintosh $60.00
Cinematize 2 Pro for Macintosh $130.00
15 day free trail
http://www.miraizon.com/index.html

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