Mp4 is a compressed format, so when you edit and compress it's not going to be the greatest quality but should still be OK for the web, when you've finished editing go to File menu > export > using compressor.
Once you're in compressor you'll have to experiment with what gives you a good outcome.
As for stills using photoshop with the image saved as an RGB .psd image will give you the best quality
aka Newbie Wan Kenewbie. "The young Newbie, is now a Padawon."
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Final Cut doesn't seem to want to work with the mp4 files, it gives me a generic error message when I try to look at them in the viewer. I've read that mp4 isn't meant to be used as in editing programs. So I used MPEG Streamclip to convert them to .mov. There's some loss of quality, but not much. Is this the best way to go about this?
I've now tried using .psd for my stills, but am still getting really bad quality deterioration, despite starting with hi-res files.
Maybe there's an issue with how I'm exporting the files? I tried Export>Quick Time Movie, which produces a file with pixilated stills. I tried Export>Using QuickTime Conversion, but that takes seemingly forever for a 1.5-minute clip. The Export>Using Compressor option is grayed out. Any idea why this would be?