Best Settings For YouTube and Vimeo

When my camera's footage is uploaded to Final Cut Pro 7 the settings show as:
Frame Size: HD (1440 x 1080) (16:9)
Compressor: Apple Intermediate Codec
When I send it to compressor I keep the settings the same, but when I try to upload to Youtube or Vimeo, the upload fails.
To fix this problem I've compressed everything within the settings that Youtube specifies:
H.264
1280x720 resolution
But the quality drops dramatically. I've noticed that some other videos on YouTube still maintain very high quality though and I'm wondering if I could do something differently or compress to different settings to get better quality.
Thanks for the help.

Funny Cakes wrote:
Sorry for all the questions, but where in the camera manual should I look to find info about the codec?
It shoots HDV.
Also not sure what you mean by AIC?
Shorthand for Apple Intermediate Codec.
When I first uploaded the footage I tried using final cut's "log and transfer" and also "log and capture," but couldn't get either to work.
Log & transfer will not ever work (for this camera's particular footage). Log & Transfer is aimed specifically at data-based cameras that record to memory and/or hard drives like Panasonic P2 cameras, RED, Canon DSLR's, etc. Not your camera which records to tape.
So, when you say Log and Capture didn't work, what do you mean? What happened? Nothing? Camera not recognized. Error messages?
Does this, other thread, help at all?

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