Thinking that poor quality could be a scaling issue caused by the use of Clean Aperture during export, tonight I've done two things:
1) I went back to my attempts to use 720p DVCPRO HD in iM08 because it plays back VERY smoothly. I converted h264/AVC to DVCPRO HD. (Result claimed to be 1280x720, but I know it was 960x720 because that's the definition of DVCPRO HD.) When imported and exported from 08, the DVCPRO HD movie looked horrible and was reported to be using Clean Aperture: 1248x702. This despite choosing the UPPER 1280x720.
In QT Player there is, under PRESENTATION, a way to switch off Clean Aperture and switch to Classic. Now the movie became 1280x720, but still looked horrible.
On a hunch I put an HDV 1280x720 as the first clip. The exported DVCPRO HD movie now looked wonderful, yet it still was reported as Clean Aperture. So Clean Aperture did not seem to affect quality, but scaling did. Therefore, I was motivated to keep looking at scaling.
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I found, from Apple, this:
The Conform aperture setting allows you to specify how the outside edges of the video are processed during playback. Depending on how the movie was created, and its aspect ratio and resolution, the portion of the image area that has the best quality and is intended for display will vary. During playback, QuickTime adjusts the image using the selected aperture setting to obtain the best visual clarity.
Classic aperture uses the dimensions as specified by the track.
Clean aperture crops to the clean aperture area and SCALES the image according to the pixel aspect ratio of the track. The clean aperture area excludes the edges of the video where digital artifacts might occur.
Then, I found this:
Blackmagic Design has implemented a feature request from Apple that Final Cut Pro movies captured with our video capture hardware, be tagged with their nominal clean aperture attributes. Accordingly a 1920 x 1080 QuickTime movie will appear as 1888 x 1062 when opened with QuickTime Player. There is nothing wrong with the movie as the aperture setting is simply a metadata tag which instructs QuickTime how to display the outside edges of the movie and the pixel aspect ratio of the video track.
How does this affect my movies?
You will not see changes to your movies in Final Cut Pro as it does NOT invoke the clean aperture settings. However, other QuickTime-based video applications may use this setting which may affect how the files are presented or PROCESSED.
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In iM08, the UPPER 1080i setting works as it does in FCP. Clean Aperture is not applied. It takes 1080i video and, without scaling, passes it into a file. Looks good.
In iM08, UPPER 720p: Clean Aperture is generally not applied. DEINTERLACE is applied to 1080i and THEN scaled to 720p. Looks good.
In iM08, LOWER 1080i: Uses Clean Aperture that crops the interlace video and then UP-SCALES -- which screws it up.
Why?
Because, for speed, iM scales interlaced lines instead of de-interlacing and then scaling.
For 720p video and 540p video and one-field-only SD video -- this crude scaling works OK because each frame is progressive.
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With iM09, Apple may have decided that for uniformity, QT-based applications must apply Clean Aperture to all outputs. Thus, the UPPER 1080i and UPPER 720p settings now always use Clean Aperture. If I'm correct, this isn't a bug that Apple will fix.
But, why is the DEINTERLACE function disabled when you request the export of 720p? This seems like it is an issue that could be fixed. However, since the only use for 1080i to 720p is to support internet streaming AND since Apple has already got it's marketing buzz from supporting Utube -- they may have decided to prevent you from HD streaming. Apple may choose to later offer SHARE TO Utube HD or to SHARE TO MobileMe HD. (Perhaps when it finally kills iDVD?)
Of course, Apple could re-open the door to 1080i output. But, the only use for that is for those that want to burn BD using Toast (not from Apple) and a BD burner (not from Apple). I would not count on Apple opening this path since they make no $$$ by doing so.
Bottom-line: I think Apple knows full well that the use of Clean Aperture WITH fast-scaling has negative side-effects just as it knows full well the Share to IDVD doesn't improve quality of our DVDs. So, if you want to keep using iM you'll simply give-up on optical discs and HD streaming.
PS: Curious if 540p QT export is also now using Clean Aperture size video.