Downscaling(from MTS) issues

Hey there, I'm trying to downscale from 720p to SD but the quality regardless of what program i use (save for photoshop) gives me blurry quality.

I can't afford hardware that will downscale so I'm stuck to software. So far i've tried premiere pro cs4, media encoder, FCP, quicktime but they all give me blurry outputs.

I've been trying to get photoshop to do it via a script since i have literary hundreds of videos that need to get scaled down and i can't sit there doing it one by one but even though the action script looks fine in theory it gives me a retarded error after rendering one file that a file is open or hasn't been closed and stops....even though I specifically said in the save as file format to renamed them with a sequence number attached at the end.

Any ideas on what I might be doing wrong?

PS the issue happens regardless of the codec or quality settings, everything is updated. I've tried rendering out with no compression at all and it still comes out blurry....i've used EXACTLY the same settings as i have in photoshop but the video still comes out blurry...so annoying!!!!