I’m having the exact same issue as 11th Floor. Using the “best quality 90 min” settings produces an awful looking m2v from a crisp Motion animation. I tried using a different setting, Animation NTSC (which I modified so it became 16:9) and the results were perfect.
Unfortunately, this setting outputs a .mov file, not the .m2v/.ac3 combo. And it’s a big .mov file, that DVDSP has to recompress! Plus, only small segments of my movie are animations.
How can I get Compressor to apply compression appropriate for animation to just the segments that are animations?