Loss of quality when importing Mp4 files

When I import Mp4s into iMovie HD 6.0.3, the video quality suffers. And if there's any movement (panning/tilting) in the video, edges also look wavy once imported.
These Mp4 files are not from a camera. Rather, the original video was on VHS. I dubbed it to DVD, then ripped the DVDs, creating the Mp4 files (which look fine in Quicktime 7.4).
I'm hoping someone here can tell me if I can adjust settings somewhere so that the mp4 files will appear just in iMovie HD 6.0.3.

These Mp4 files are not from a camera. Rather, the original video was on VHS. I dubbed it to DVD, then ripped the DVDs, creating the Mp4 files (which look fine in Quicktime 7.4).
Lets see: VHS > mpg-2 > mpg4 - that is a LOT of conversion steps if you expect to maintain quality.
I tell people to think of each conversion step as a 'hammer' that 'beats' on your data because every conversion step costs you quality. I doubt there is anything magic you can do to your mpg-4 files.
The BEST thing for you to do would be to transfer your VHS images directly into iMovie. Many miniDV camcorders have a pass-through feature that makes this easy. My second choice would be to use something like DVDxDV or MPEG Streamclip to convert the video on the DVDs to DV video for use in iMovie.

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