image quality issue

My understanding of FCP is quite low, so feel free to treat me like an idiot in your responses. I won't take it personally.

I have been using Handbrake to transfer some DVDs to my macbook pro in m4v format.

When i open them in FCP they take a very long time to render (minor issue) but the image quality is much as is on the DVD itself. After cutting the section i want and using H.264, best quality compression the final movie's image quality is much less high. Slightly pixilated and less clear. (major issue).

Can anyone give me some advice?
let me know if u need more information.

many thanks,

Will