HDV footage shot on XHA1 compressed looks like snot. Pixelated.

Hi there all knowing gurus of FCP.
I'm wondering why (and the best way to avoid) i'm getting artifacts and pixelation when I compress my HDV 24P footage (shot on XHA1)using the compressor HD1080p24 and H264 (in QuickTime Conversion). The pixelation is mostly happening in the blacks and it's awful blocky. Looks terrible.
What compressor should I be using?
Is it because it's such high res footage and I'm compressing it too much? What's the deal.
I appreciate any advice. Thank you.
L

Are you setting a data rate for this? Or using "automatic"? My guess is your data rate is way too low.

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