As a test, export an uncompressed *.avi using UYVY. It will give you a large file, but it will also give you the best possible quality.
Switch between the Source and Output tabs (upper left of export screen - before AME) to check that the video & sizes are the same, no black bars, etc.
If that resolves your issue, you can use another program to compress the video to a more reasonable size.
This will tell you if the issue is with AME (most likely) or elsewhere.
You missed the opportunity to supply much needed details, like project settings, source material, codec, hardware, etc.
If looks like your hardware can not display the preview, possibly because of lack of muscle for the material you use.
You can only judge the results on a properly calibrated external monitor, not on the preview screen.
thanks, im nowdoing the same but not on OYVY but the other one..thx for the reply, im gonna check if it's gonna work for me!
damn, it did not work, ....
still the same bad quality, but the output is now 8 Gigh
ok, hmm, anymore ideas?
See #2 and the link I provided.
and now there are A LOT more pixels, making the text unreadable,...
That's because your still image size is different from your sequence frame size and the image is being scaled.
If you had provided the details Harm asked for this would have become clear much sooner.
Create your still images with the exact same resolution and pixel aspect ratio (PAR) as your sequence and you won't see that quality degradation.
To add to Eddie's recs. I suggest doing ALL of the scaling/re-sizing outside of the NLE. I've found that the algorithms used in Photoshop are superior to those in Premiere (through CS3 - do not know if CS4 improved these). The quality difference should be noticable on critical viewing. Re-sizing BEFORE Importing, also reduces the workload on the NLE. Just a few Acitons in PS, and you can batch re-size your entire load of stills.
I take Eddie's advice for the vast majority of my still images, and if I need to pan on a zoomed out image, will re-size that/those up to exactly what I need, above the frame resolution/size. The majority do go with exactly what the Project Presets are.
I think you have got your PAR set wrong on the still, because in the Program Monitor you've got black bars on the side.
Check your interprete footage.