How to compress for SD quality?

I have bought a few HD movies from itunes and they look great on Apple Tv.
I have also compressed some HD broadcast material using FCP and Compressor and it looks great.
My problem is with SD.
I captured some SD dvd into FCP and compressed through compressor for Atv and it looks pretty bad.
Any other programs that can do a better job?

Humm- I'll have to check. Maybe they offered it for rent in HD and I thought that's what I bought.
That just means I bought a SD version and it looks so good- I thought it was HD.
So how can I get that quality at home? What code does itunes use to compress?
I tried Handbrake- and it works good for SD movies, but I am trying to burn TV DVD's and Handbrake has trouble with all the chapters and extras.

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