Help, whats happened to the quality of my video?

I just recorded a video, that in the background i have a black sheet of paper with a light reflecting onto it. When i view the video in the 'Camera import window' the video is excellent quality, however after importing it the quality is drastically reduced and my background is Heavily pixilated.
I noticed that in imovie preferences it says in 'Optimize video' that if i select full size 'on this computer may result in degraded video playback'. I tried this first and it looked bad, then i tried it at large 960x540 it looked better but there was still large pixilation.
What do i need to do in order to have the video looking the way it does in the 'camera import window'?
Pls help me i need to get this done asap!!

Thank you for the response, I looked for the "Watch in HD" button when I pulled up my video to try it but didn't see that option anywhere. Also, I don't have to do that to watch other people's video's and most of them look just fine. Should I have uploaded it a different way from iMovie? Actually, I don't even think it gave me any other options than just "upload". I appreciate your response.

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