Converting Nokia N95 video for editing in Final Cut Pro?

I have some .mpeg4 videos shot with a Nokia N95 mobile phone that I want to edit in Final Cut Pro.
I read everywhere that .mpeg4 is not an "editing format".
I want to use Quicktime Pro (or Mpeg Streamclip) to convert the footage to something I can use in FCP *without degrading the original quality* but I am completely lost as to what settings I should use.
Can anyone point me in the right direction? I have done some test conversions but a side by side comparison in Quicktime of the original and converted footage showed the latter to be softer, less contrasty and with different colours. Not at all what I wanted.
I've posted this question on th eFCP and iMovie forums but haven't had any definitive replies. Is this really so complicated?
Thanks in advance!

I've been using iMovie 09 with these files but because the image quality is pretty poor I need the image correction functions of FCP. I can import the .mpeg4 files to FCP OK and work with them but I seem to spend all my time rendering. This is why I began to wonder if my initial file format and sequence settings were what they should be (and I am completely lost here).
The edited film will be uploaded to blip.tv and then embedded in websites. My concern is not to degrade the quality during my workflow.

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