Some time ago I also asked for suggestion to obtain high definition quick time movies to play on an Apple iMac. Here is what I hae used:
My camera is a Sony HDR FX1, and I am shooting in HD fomrat which is 1440 x 1080 25 fps interlaced. My project settings are PAL HDV1080i. I capture my footage using HDVSplit, so the file format that I import into PRE8 is .m2t.
As outputsettings I have created my own settings, as the two default settings available have lower resolution and quality, so I changed the settings to the full frame size of my footage (1440 x 1080) and also adjusted the frame rate to 25fps. Also I have increased the quality to 100%, but the output shows 10% quality if I may say so: very pixelated.
I have updated my graphic card (nVidia) to the most recent version, as well as Quick Time. What else could I do to improve the qualtiy of the output?
That's a tough one. I'm not sure what to suggest. Sometimes when you create your own output presets, you change something you shouldn't (like making the video anamorphic rather than a square pixel H.264, for instance) that can negatively affect the quality.
You may want to post this to the Muvipix hi-def forum. Lots of very smart, very helpful video people there -- and if there's an answer, it's likely someone there knows it.
One other solution is to use the Mac rather than Premiere Elements to convert this file. Both iMovie and Final Cut should be capable of working with those HDV files natively, and they live in the land of MOVs.