Oh, sorry.
If you recorded MPEG2, then you’re stuck with that quality. Transcoding to to anything else will not increase the image quality, it will just make the footage more edit-friendly.
I would capture your footage and transcode it to DV/DVCPro NTSC for editing. If you want to burn it to DVD, you have to export as MPEG2 anyway, but at least the image quality won’t degrade during editng anymore due to the Long GOP of MPEG
