Yes, do not output to quicktime, and thne mpeg2, what i always do is, directly from final cut pro, is export the sequence using compressor, and on the settings, click on dvd fastest encode, or best quality, whatever your choice, and walah, theres a clean mp2 file for you. so yeah just skip the quick time process, try it, if im wrong please let me know, but all my videos come out excellent that way,
hope this was of some use, let me know what the results were
Sounds like you are seeing interlacing noise. Either you are discarding the wrong field (DV uses lower field, almost all other formats use upper) or you are not applying a deinterlace filter on the material. If the primary playback will be from a set-top box and TV, then I would suggest you not deinterlace, as you will lose valuable vertical resolution. If the primary playback is for desktop computers, then deinterlacing may be of more value, and you may be able to achieve better encoding results encoding to a resolution of 352x480, especially if targeting low bit rates.
If you're using QuickTime Player Pro, go into Display Properties, and check High Quality and Single Field. If that fixes your problem, it's just that your source is interlaced. If it doesn't, it's something else.
I think I have been having the same problem and just solved it. The issue had to with field orders and the fact that the default 'native field dominance' in Compressor is set to "top first".
By nature, Final Cut Pro is QuickTime-based, so there's really no way around that aspect. Try file -> export -> QuickTime Movie (from your seuqnce in FCP) and uncheck the 'Make Movie Self-Contained' box. The file will only reference the existing media on one of your drives. Drag this reference file into Compressor, select whatever type of Mpeg2 you want and select the file in the Compressor Batch area. This will bring up the Inspector where you can change more specifics about the Mpeg2. Select Bottom First in the Field Dominance pulldown under Video Format. Compress as always, burn and voila! It did it for me anyway.
I apologize if this sounds overly-simplified. I just had enough failed tests that once I got it to work, I felt that I would share. I am (obviously) no DVDSP / Compressor guru by any stretch. Hope it helps.