did you get to the bottom of the problem? i have the same problem. i've tried importing numerous non hd video files from at least one dozen different sources (vhs, dvd, mini dvd, cameras, video cameras, sd cards, etc.... i've tried using/converting to mov, mp4, dv, avi files, to name a few. after importing into my computer, all look fine, untill i import into fcpx. i use import data with optimization. the images blur and the color pales. if i import straight to idvd, they look fine, but they need editing, so i need fcp. Tech support wants all of the specs. for all of the sources and files that i'm having problems with. i'm not a computer/tech geek, but i do have some uncommon sense...... When you have 10-15 different files (that are all different file types), from many different sources, that looked great "pre" fcp, and become degraded when in fcp, it's obvious that the specs. of the files/sources are irrevelant. i even went to the apple store and was told by a so called "genius" that my problem is because fcpx is an hd program, and my files are not hd. the bottom line is, when i watch them in quicktime, realplayer, and idvd on my computer, they look great. after importing into fcpx........ ****! i've also burned dvds to see if they only look bad within fcp, but the dvds look just as bad. sorry to unload and vent, but either i have a bad download of fcpx and experiencing what no one else is experiencing, or there is an elephant in the middle of the living room that everyone is pretending isn't there. if you solved your problem, PLEASE let me know how. thanks.