I want to thank those who have given me advice on this problem. Once I viewed the sequence on a external monitor it appeared better, but it was not until I created new layers in photoshop for the effects on the text and photos did it get better. Thanks again.
If you are wondering how to log and capture right from the camera, firewire the camera to the computer. Open final cut, go to the log and capture window and change the input device to non-controllable device.