The way to get the best quality encode, especially from a high compression codec like HDV is to export to Compressor from the FCP timeline. This will take longer and ties up FCP but it does do a better job. Also if you can use CBR at 6-6.5 Mbps, this will give you the best that compressor has to offer. You can try a short clip to test out the results before doing a really long encode. CBR doesn't need much time at all but it you have to go with VBR it is always best to do at least 10 minutes in order to give the VBR something to work with.