jagged edges on LT

Can someone explain to me why I am getting jagged edges on my Live Type font when I bring it into FCP 7. I know it has something to do with my settings but I have checked them and they are the same. I shot some video 720 x 480, 29.97fps. I brought it into my timeline, settings NTSC DV 3:2 (720 x 480) When I built some graphics to place over the top of the video in LT I set my project settings at NTSC 3:2 (720 x 480). When I place the LT over the video I get jagged edges. When I bring the LT into a brand new sequence without any video, it plays back correctly without jagged edges. Is there something else I am missing? I am lost as to why these two don't work together. Any help would be greatly appreciated.

I am editing on a Mac OS 10.6.8 in FCP 7.

Glen Hinz