Are you talking about compression loss or resolution loss. The latter is to be expected, going back from 1920x1080 to 720x480.
Resolution loss I would believe would be the correct term. For example: There is a medium shot of a person from the chest up. Along her arms in the original footage it is a nice smooth line however; in the compressed version it looks pixelated like in Photoshop when you expand something too much and the edge is jagged.
That is probably the result of poor scaling, something Premiere is not especially good at.
To update you: I tried the way through AE and I don't see a way to output it other than going in Premiere. Maybe I'm missing soemthing but that just puts me in same box I was in with Premiere I just scaled it in AE. So the result is letterboxed nice but about the same quality.
I then read further in some of the very helpful Jeff's posts and learned about the setting for MAX and I did that. It took 16 hours to render one DVD. however; the quality is more what I expected. I'm now rendering one in the Blue-Ray version to see what that looks like.
Question, would I be better off rendering this out as an AVI and then using a third party compression tool like Sorenson?
Premiere makes a mess of downscaling hdv to sd.
If you want good results in hdv to sd search the forum for Dan Isaacs hdv to sd workflow.
In short; exporting timeline to hd avi, next with an avisynth script converting it to dvd-mpeg2 with the HC023 encoder.
Where is he by the way where is Dan?