Converting AVI to MP4

I have a number of older AVI files that I'm trying to convert over to MP4 so that I can not only play them on my computer, but on my HD TV as well.  They are older, like I said and not in HD, but having the ability to show off my videos on the big screen
I pulled them into Premier (using the school computer after class) and queued them to convert to MP4 using H264 and 720p. Now the original files were NOT HD, and I know that the quality won't get any better during the process, but I figured that this would have less quality loss during the conversion.
The files converted in about 15 min each, and I took them home to check.  Seems to play fine from my flash drive right from the TV. Cool!  Trouble is, when I watched them on my computer screen all the way through to check the quality, I noticed problems.  During some scenes, mostly during pans, the images smeared (the best description I can think of).  It's not huge, but since it's not there on the original, I can't imagine what would cause it, unless it's the decode/encode process.
I'm going to test it with MPEG2 / HDTV 720P 24 High Quality next, but I wanted to get a feel on what would be the best option for this type of conversion.  I don't really know if my TV will play the MPEG file types since I've lost the book for it. :/
As I said, they are older files and certainly not HD so I know that the quality won't improve, and I know that some degredation will occur, but I'd like to keep it to a minimum.
Thanks in advance for any advice you can offer.
Eric the Grey

According to Premiere, the original was not ntsc (512x384 (1.0)  23.97fps, Progressive)  The original files were pulled from the camcorder (an older type that used big clunky video tapes, old for it's time even in 2003) by a friend since my computer at the time was not able to do so for some reason. He also encoded them the way they are now.
As to DVD, I actually did that a few years after getting the originals encoded, but a recent viewing of them showed that they degraded and some of them no longer play.  The disks act like they are scratched but the disks themselves are in perfect condition.  I've thought about getting a blu-ray burner and disks and putting them all on there, but that will have to wait until after the holidays at the earliest...
Anyway, I'll give the SD Youtube preset a try tonight and let you know how that works out.  I'm not terribly interested in changing the aspect to widescreen. I can deal with the black borders.  Once I've got the formatting figured out, I've got some more, even older videos to convert.  These came from some very old 8mm film of my fathers.
Thanks again for the suggestions.

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