Transition distortion and choppy bird wings - please help

Hello. 2 issues please.
*1. Transitions*
Lately, I've noticed that when I use certain transitions, after they're exported they come out rough, pixelated, and grainy -- cross-stretch in particular. It looks fine in the project. You can see an example of this distortion in this short vid where it's the only transition I use:
http://www.youtube.com/watch?v=VyBdhexZnCY
This video (as are all of mine) is also published on 8 other sites (magnify, yahoo, myspace, daily motion, blip.tv, viddler, and metacafe.) Videos are uploaded to TubeMogul which then distributes them accordingly. So the quality varies from site to site, even though my settings for the video are the same. For example, the transition looks the best on blip and viddler - the sites with the best quality consistently.
*2. Choppy Bird Wings*
I videotape lots of birds in flight -- mostly raptors. On YouTube the wings in motion frequently appear chopped up, pixelated, and considerably distorted. The other sites are better. I know this has something to do with fast moving objects, but I hardly ever had this problem in the past. Only since YouTube removed its requirement that all vids could not exceed 100 MB.
I tried making a separate vid for YouTube exceeding the 100 MB. I experimented with different settings. Really didn't solve the problem. I even tried their new tips for Apple users and it just made things worse.
I'll tell you what I usually do, and then show you what YouTube recommends: First, my way:
Export -> quicktime conversion -> save menu:
format: mpeg-4
Options: file format: mp4
video format: H.264
image size: 768 X 576 SD
frame rate: 30
key frame every 24 frames
Video Option:
restrict profile to main
encoding mode: best quality - multi-pass
data rate: whatever gets me closest to 100 MB which depending on the video of course is usually anywhere from 2000 to 3000.
Now this is what YouTube recommends for Apple users:
In the Options box:
1. In the Video section select the following:
* Compression Type: H264
* Frame Rate: 30
* Data Rate: Automatic
(if you choose to restrict the Data Rate, make sure to choose the highest value acceptable to you- more bits = better quality)
* Key Frames: Automatic
* Frame Reording: Unchecked
2. In the Video section click "Size":
Dimensions: Set this to the original size of your video (Note: HD resolutions preferred- 1280x720 or 1920x1080)
3. In the "Prepare for internet Streaming" section:
Select the "Prepare for internet Streaming" and choose "Fast Start" from the drop-down menu.
4. Once you've made all of these selections, click the "OK" button to save your preferences.
5. Add a title to the video file and click the "Save" button to save your edited version of your movie. Your project will then be exported and be ready to upload to YouTube.
(end of YouTube instructions)
Okay so I've never made it for streaming. That box never even highlights when I'm doing my settings. When I did it their way, everything was much worse.
What am I doing wrong? How can I eliminate the distorted transitions and the choppy wings? I realize I might need to make a video with separate setting for YouTube, but if so, what would that be?
Here are my specs:
FCE 4
Camera: Canon ZR 900
I capture with firewire to iMac (Mac OSX (10.5.6) Snow Leopard)
frame size is usually 720 X 480
video rate is usually 29.97 fps
pixel aspect usually: NTSC CCIR 601
16 bit integer
If you need any more information about what I'm doing, please feel free to ask. Thanks,
Judy

Well I'm not seeing the exact same settings in the dialogs that you may be seeing; I'm running FCE 3.5 on the last version of Tiger (10.4.11) so that may be why. But generally the different settings have different data rates and can have different frame sizes too. For example, in the MP4 settings, some default to a 320 pixel width, obviously expecting to be shown on portable devices.
There are more qualified folks here than me to give advice on your jittering wings and transition issues, but I'm thinking your video was showing some interlacing that may have been amplified due to some mismatch of settings in FCE and your original footage. This I think accounts for the error messages you might be getting.
Basically you should go to your browser palette in FCE and find the window with your imported & captured clips, and show it all in list view. Then you can scroll horizontally and look at all the vital specs of your original footage. Is it shot in regular DV or anamorphic DV? Is it 720x480? etc. And then you need to make your Sequence settings match that.
Right-click on your Sequence icon (or select it and go the Sequence menu up top) and select 'Settings'. Then click the button that says "load Sequence preset", and load the preset that matches your footage. The pop-up menu has several options; you can ignore the PAL presets if you bought your camcorder in the USA. If you've shot in DV (I think you did) then you're looking for the DV NTSC presets, and you should probably use one of the 48Khz presets (the Khz refers to the audio sampling quality) and choose the anamorphic preset *if your original footage is anamorphic*. If it's not, then choose the non-anamorphic preset. (anamorphic is 4:3 footage later 'stretched' horizontally into 16:9.)
I have no experience trying to mix and match 4:3 and 16:9 anamorphic footage in the same sequence but I can imagine there would be issues with that. Again, other folks here will answer that better than I can.
I hope this gets you started.....

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