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If you're using an AVI created in Pinnacle (which can mean a number of things) you may not be comparing apples to apples.
Do a test with DV-AVIs captured over FireWire with Windows MovieMaker or the free utilty WinDV and import that video into each program. I think you'll find that, with an optimized source file, the program will more than hold its own, DVD encoding wise.
The test of each program would be to author a DVD (use RW, so you don't spend a bunch of $ on test DVD's) and then watch that through a DVD software player on the computer, or on a set-top player to TV.
As for the display in the programs, there are a couple of things to look at. In PE, if your DV AVI Clip shows a green line, above the Timeline, it does not require Rendering. If it's red, just hit Enter, to Render it. If you Rt-click on the Display Monitor, you can choose Fit, or one of several resolutions - choose 100% and see if your display improves. Fit is basically a "draft preview," sized to fill the Display Monitor, where 100% should show the actual detail.
It's been a long time, and several versions ago, since I last used Pinnacle, but I was less than impressed by its "monitor" back then. However, I am going both from memory and also this was on a previous laptop. Though it also had a 17" monitor, the rez was way down (totally different GPU), than what I am now using.
I have Power Director on my workstation (dual 21" CRT Hitachi 915's), and I see no difference between it's display, and that in P-Pro2, when I switch it to 100%. They both look the same to me. Do not have PE on the workstation, and do not have Power Director on the laptop, so I cannot compare those in an A-B situation.
Going back a couple of versions of P-Pro, Adobe went from DirectShow display to a common display engine for all of their programs. It has been my experience, when setup to 100%, that their displays are equal to, or better than, any program using DirectShow. This is for footage that does not need to be Rendered, or that has been Rendered, and is for 100%, and not Fit. I do not know if Pinnacel and Cyberlink still use DirectShow.
One last item to consider is the display settings on your monitor. Because Adobe does not use DirectShow any more, you could have differences there. I'd spend just a bit of time with the settings on your monitor, both in the Windows' Display, and in your GPU's utilities, to see if you can "calibrate" your monitor for best viewing of the Adobe display engine. In my nVidia Quadro 4500FX control panel, I have one setting for "Print Work," and one for "Video," and my needs fluctuate between the two. I also use Adobe Photoshop's Adobe Gamma utility to set things up for my print work. It is no longer included in the latest CS3-CS4 Photoshop.