Here is a tutorial on how to use Compressor and DVD Studio Pro to get the highest image quality.
What video compression does is essentially take your original video and limit the amount of information that it contains, allowing it to fit on different formats. Most distribution outlets, whether it is a digital location such as a video hosting website like Vimeo or a DVD that you burn, are not going to allow the largest and most high quality type of digital video file. This would be too difficult for streaming viewing or to fit onto a storage medium. To allow it to fit here you are forced to shrink it, but it can often be hard to figure out exactly how much and in what format. DVD authoring is a specific focus for video compression as many video compressors come as part of middle child in a workflow that brings video editing to DVD authoring. Here is a look at how to bring the highest possible video quality through compression for DVD authoring using selections out of the Final Cut Studio for a pointed example.
You are going to begin in your video editing software unless you have already exported to a QuickTime or other type of movie file. At this point you can either go to File in Final Cut Pro and select Send To>Compressor or simply right click your QuickTime file and select to open it in Apple's Compressor.
Once the video is open in the project viewer, you are going to need to go down below to the Settings menu to find what you want. In Compressor 3.5, and in most video compression programs, there are going to be presets for different types of transfer such as streaming video or iPod / iPhone. You are going to want to find ones for DVD authoring, and in Compressor this means selecting the DVD folder. In here you are trying to make a choice between the DVD codecs to find one that is going to retain the highest quality video possible for DVD authoring. You do this by making a choice between them based on the lowest run time possible, which is supposed to correlate to how much run time will be allowed onto the DVD under that specific compression rate. The lower the run time indicates the higher the video size, and therefore the higher the resolution. Since you are making your codec choice purely on video quality you want to choose the shortest run time, which in Compressor is going to be DVD Best Quality 90 Minutes. Do not choose DVD Fastest Encode 90 Minutes as this is more focused on speed. Drag and drop this into your project, set the destination, and you can begin compression.
Make sure that Compressor, or whatever video compression program you are using, spits out a single video and audio file. You can then import this into DVD Studio Pro as Assets, put them on a track, and link it up to play. When you finally burn your DVD you will find that the video resolution and quality is not that much different than it was as a high volume QuickTime file.