MPEG1-DV conversion using MPEG Streamclip. Help!

I am having problems converting an mpeg1 movie clip for editing in iMovie.
I recently recorded a concert on my Sony DCR-HC40 camcorder. The majority of the concert was captured to cassette in DV-PAL format (720 x 576, stereo, 48 kHz at 25 FPS).
However, the final third of the concert was captured on the camera's MemoryStick Duo in MPEG1 muxed format (320 x 320 at 25 FPS). The clip is 84 Mb in size.
I want to convert the mpeg clip into the same format at the cassette footage so that I can seamlessly splice the two sets of footage in iMovieHD with as little depreciation in quality of image and sound as possible.
So far I have simply used the 'export to DV' command from the File menu in MPEG Streamclip. But this produces a noticeably crackly-sounding depreciation in sound quality and no improvement in image quality - rather the reverse infact, since when viewed in the larger Quicktime window, the clip shows up the poorer resolution of the original clip.
What do I need to do to get the original mpeg clip to as near a quality as the cassette footage, for editing and burning onto DVD for display on a TV?
Any guidance would be much appreciated.
BTW, I am running Tiger 10.4.3 on a Pb G4 (QuickTime 7.0.3/iMovie 5.0.2)
PowerBook G4 17 1.5 ghz 512 MB Ram   Mac OS X (10.4.3)  

mpeg1 footage is only fit for showing on screens no larger than an iPod photo or mobile device?
MPEG1 is usually encoded with low resolution and rather low bitrates so the quality is often rather poor.
However, MPEG1 CAN be encoded with DVD-like resolutions and bitrates so the quality CAN be quite good (MPEG1 doesn't support interlacing like MPEG2, though).
It would be a shame to lose the footage as it was part of a concert of Handel's Messiah.
One option could be to do minimal edits to the MPEG1 with MPEG editors like MPEG Streamclip and burn it as a VCD or DVD (they both CAN have the same video although DVDs rarely use it). Then you'd preserve ALL video quality there is.
...but this won't work with your 320x240 video because the VCD/DVD compatible resolution is PAL 352x288 or NTSC 352x240. So you'd need to re-compress even your 320x240 MPEG which degrades quality.
So your best quality option is to watch the MPEG1 on a computer monitor via MPEG Streamclip, QT Player or some other viewer.
Or, you can convert to DV and blend it with the high quality DV tape material. Converting MPEG to DV should not much or at all degrade quality because DV is a much higher quality codec than your MPEG1 source.
Bit Rate: 0.73 Mbps
Duration: 0:16:16
Data Size: 84.79 MB
That's quite low. A DVD uses about 4-6-8 Mb/s and a low quality low res VCD uses 1.1 Mb/s. So your MPEG1 quality can't be very good to begin with.
Audio Tracks:
192 MP2 mono, 32 kHz, 32 kbps
That's very low, too. Even a low quality MP2 often uses 192 kb/s. And the 32 kHz must be resampled to 48 kHz for DV or DVD use.
when played, either via streamclip before conversion, or in QT (I don't have QTPro) after conversion to DV, distorts at quite low levels in a way that a QT movie from cassette does not.
I'm afraid that there is not much you can do if you hear the distortion even BEFORE any conversions. Some dedicated audio processing app might soften the distortion but I wouldn't count on that.
FWIW, you might try to convert using the "Low Level" audio. From the MPEG Streamclip guide:
"For MPEG audio tracks (MP1, MP2) two different audio levels are available for playback and conversion to MOV, DV, AVI, MP4 and AIFF: "High Level" and "Low Level". You can choose one of these two levels using the "Audio Mode" pop-up menu. The default level is "High Level". Use "Low Level" if, and only if, the converted movie or AIFF file shows an excess of volume."
you also mention that re-compressing with iDVD will further degrade quality. Is this true of both types of footage (mpeg->DV & DV cassette)?
MPEG2 compression used in video-DVDs will ALWAYS degrade quality. High quality material (such as DV) tolerates this better so you might not even notice it. So you should use high bitrates if you want to convert and burn the low quality MPEG1-converted-to-DV material as a DVD (with iDVD use Best Performance or don't exceed ~70 minutes with Best Quality).
would I need to get Roxio Toast? What is the difference between this and IDVD?
Toast 7 can be forced to burn non-valid DVD resolutions as a video-DVD (MPEG Streamclip can be used to prepare the MPEGs) with no re-converting or quality loss but those DVDs are not guaranteed to work on standalone DVD players so I'd not use that route.
Basically, what I'd like to acheive is a nicely-edited home movie with titles etc, to put onto DVD & VHS, of a 2.5 hour classical concert, in as good a quality, audio/visually as I can, from the two types of footage, spliced as cleanly as possible. The footage is continuous, but the media changes from cassette to mpeg at a certain point.
Don't exceed ~70-75 minutes with iDVD because after this the quality starts to drop. Toast 7 can burn somewhat longer high quality DVDs than iDVD because it uses compressed AC3 audio so it doesn't "steal" bandwidth from video as iDVD does with its uncompressed PCM audio. But compressing that low quality audio might not be a good idea either!

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