Help!  heavy pixelation in idvd

Hi everyone-- I've seen different posts dealing with different aspects of this problem...
Heavy pixelation in my disk -- seen on monitor AND on TV -- the original FCP output does not have this problem.
Here are my project specs:
75 minutes (approx) black and white.
Captured using a Canopus ADVC110
Edited and prepared using FCP 4.5
Burned on iDVD 5.0.1
If choose "performance" (with or without background encoding) then the project size in the media window is 5.0 gigs. If I choose "best quality" it is 2.5 -- Why? -- Note that neither choice affects what the DVD looks like, though it does determine whether I have to create more coasters with either DL or single layer disks. They look the same, however, as I said.
I tried exporting without compression from FCP, and the file is 50 gigs. If I use DV compression it comes out at something like 15. They look the same, largely, on my monitor, and both are highly pixelated on the finished disk.
Obviously, I'm doing something wrong. I really don't like iDVD and will eventually upgrade to something else. But, right now I need to get this project finished.
Any thoughts? Please help -- this is driving me crazy.
g5   Mac OS X (10.4.7)  

thanks... this is helpful.
ok, then, so here is a question: is best performance BETTER than best quality? i was assuming that best QUALITY meant better quality image. is that not so?
i noticed that when i choose Performance, it does the encoding in the background. then it seems to encode again. At first, I thought that was why it was so pixelated, that it was a second generation processing.
choosing QUALITY did not allow for background encoding, and i thought fine: i can live with a long wait for a once-compressed version.
please advise.
in the meantime, i will try making a disk image and burning that in disk burning tool.
if the problem can clearly be isolated as iDVD, then i'm happy to bite my lip and go buy more from apple.
as far as disk space, i had this g5 dual shipped with 2gigs of ram and an additional 2 400g drives== so it's not space, though i will make more room on the system drive... i should be able to burn DL disks because it says I can-- and they work as data DVDs okay.
thanks for your help

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