Encoding with HV20 in PPCS3: Bad quality at 1MB bitrate

Hello,
When I encode my video from my hv20 (1920 x 1080 - 30p) with PPCS3 using H.264 at Bitrate 2MB I get very good results. However when I choose 1MB the video quality is very pixelated and distorted.
When I use my Panasonic HMC-150 I can encode at the same settings including the 1MB Bitrate setting and get excellent results.
Is the difference in encoding quality due to the camera or the h.264?
Any ideas why the quality deteriorates from 2MB to 1MB so badly. I would like to play these videos on the internet so I prefer 1MB due to playable speed.
Thanks,
Simon

Hi Harm,
Actually I am using 29.97 FPS for 592x328. Is that part of the problem?
Is there a rule when scaling down and trying to figure out the dimension size of the video?
15fps? Wouldn't the video be less smooth?
I appreciate the tips.
Simon

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