Using Compressor to Deinterlace and compress to H.264?

I'm a video novice, and a bit puzzled as to why Compressor was included with Logic Studio.
Anyway, I'm just in the process of copying some video from my Sky+ box (a satellite PVR, closed system) which I've bought the Canopus ADVC55 for (via a 0.5 metre QED Qunex SVS cable). It converts S-video to DV.
I've tried using Quicktime Pro and MPEG streamclip to deinterlace and compress to H.264, but the results from Quicktime were terrible (blurry - my wife described it as looking like a VHS recording), and while MPEG streamclip was better it's clearly inferior to the source.
Since I discovered that Compressor (3.0.3) came with Logic Studio and I have it on my hard drive, I thought I might as well give that a try. Unfortunately I cannot (even with reading the manual) work out how it works, even so far as being unable to get the Frame Controls menu to appear!
Any tips for a beginner would be very welcome!
PS. While it seems a little unnecessary for my purposes - would it be worth getting Final Cut Express? I really just want to trim the video (perhaps cut out adverts) and export for the Apple TV in H.264 and deinterlace.

MPEG Streamclip is only an interface. It uses QuickTime and whatever QT plug-ins as its engine. It gives you the demux option for MPEG-2 files, which is its intent, but it is still QuickTime.
Compressor has a much more complex and capable compression algorithms. Unfortunately, compression is mathematical operation and requires a bit of knowing the process. You don't need to know a lot of math, but it would behoove you read a bit about video compression. The 30 or 40 pages of the DVD Studio Pro manual is a great start if you can download it as a PDF.

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