To all who may be concern, Power DVD was the culprit, It was not allowing AE to import mpegs clip for some reason it was using some of the compression AE was using, so I deleted Power DVD now all is well.
The comp is set to full and I make sure the resolution is set to full when I render but still degraded. What I don’t understand is the footage was shot 24p but it’s show fields but when I set the fields to lower the fields are gone but the footage lose quality.