i edit and post videos on myspace all the time for work (yes, i get paid to play on myspace all day, among other things) and your probelm is one that i was having as well, esp because if you cut video in sync with audio, the myspace player (and youtube player, incidentally) gets it out of sync, plus as you said, it's recompressed and looks terrible.
the best (free) option i've found is to use google video to upload and host your videos (video.google.com) and then embed that uploaded video in your myspace page using the html that google provides. even though google changes the format of your video, the result is still far better looking than youtube or the myspace player, and the audio stays in perfect sync.
after your upload to google is complete, there will be a screen with options to email your video to friends. under that, there is a link that says "embed HTML". click on that, copy the code, then post it wherever you want on your myspace page. done and done.
also, i'm not sure if you have to be "invited" to google video like you do for gmail, but if you do, let me know what your email address is and i'll send you an invitation.
-gardner
G4 Powerbook Mac OS X (10.3.5)
iMac 20" 2.33ghz intel, 2g ram, 500g hd, final cut studio; G4 Powerbook Mac OS X (10.4.8)