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My first guess would be that "everything you read" may not be correct. These are two different codecs. You may not be able to compare them apples to apples fashion.
Meaning one codec may require a higher bitrate to provide the same level of quality as another.
Okay, that is true, they are different codecs. But even adobe says:
Q: How does H.264 compare with the current video formats supported in Flash Player?
A: Flash Player supports the Sorenson Spark video codec (based on H.263) and On2 VP6. H.263 is the predecessor of H.264 and was designed for teleconferencing applications, at 64k rates. H.264 delivers even higher quality at lower bitrates. H.264 will deliver the same or better quality when to compared to the same encoding profile in On2. Factors you should consider when choosing a format include the complexity of the content, the desired reach, ability to archive, and licensing considerations.
Are there any tricks to getting the h.264 to look "better" than the h.263? Like, the h.264 version of the video doesn't even look close to as good, and I think that the f4v version looks worse than the mp4, which I don't really understand since they are both h.264 files. The footage is from a canon XL2 and the original source is ntsc 720x480. Is there anything special I should be doing for encoding in h.264 instead of h.263. The video is going to be only for the web.
My only suggestion here is raise the bitrate.