Trying to produce high quality m4v content

I'm trying to find that "magic sauce" to create a sharp m4v file from Final Cut Pro.
here's my predicament:
I've edited s series of sequences in FCP; combined them by nesting and then outputted that out to a QT.mov that has 'self contained' unchecked - a reference file.
Opening up Compressor I choose the setting for "h.264 for iPod video and iPhone 650x480".
The result is fuzzy and I think that is being charitable at this time.
Knowing I'm opening up a can of questions, I'm wiling to field any and all to get an answer because, frankly, if I can't get sharp crisp m4v's then I will change that to mp4's and that will be a shame, personally.
Help?
Lawrence

Have you looked at the file on an iphone?  You might be surprised.
If still no love, try upping the bitrate and adding a little sharpening.  But remember that pushing too far out of spec may choke the device.

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