FCP 7: HD Playback with NTSC Sequence Settings?

[TeeHee]

Hey guys, I'm throwing together a highlight video of my favorite MMA Fighter and ive run into an obstacle:
The footage I'm using consists MOSTLY of converted NTSC ripped DVD footage, with some converted YouTube clips as well.

My PROBLEM comes when I try to bring in 720p HD footage into this sequence. In the viewer it looks great, but when I actually bring it into the timeline and play it back in the canvas, it is fuzzy and poor quality. I have included an image of what I am seeing, as well as the sequence settings I am currently using (first is the viewer and canvas side by side. Look for the difference in the letters to see the drop in quality. The second image is my sequence settings)



What is the reason for this loss in quality when importing HD 720p clips (NOT the ripped dvd clips)?? Is it because of my sequence settings being at NTSC? I have it set here because the majority of my clips ARE NTSC, and I didnt want to waste a lot of space constantly re-rendering my clips. How can I fix this to where I can use both HD clips and anamorphic NTSC clips simultaneously? I'm so confused...PLEASE HELP!

[videopoo]

Because you're taking an HD file and making it SD

[TeeHee]

^^^so, are you saying that I need to change my sequence settings to HD? If I do this, what is the best way to handle my NTSC clips so that I dont have to render each and every one of them?? Do I simply need to zoom them in enough to fit properly?

[videopoo]

Your taking a 720p file and smashing it into a 720x480 sequence. Your also making it interlaced. 720p is not 720x480.
Of course you will loose resolution. Is this for DVD? If so, then you need to change your sequence to progressive 23.98 and export out a 720x480 16x9 anamorphic ProRes for your encoder. Are the other rips from the DVDs progressive or interlaced

http://en.wikipedia.org/wiki/720p