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I would definitely capture with FCP, but if you're in iMovie and you can export a progressive file out of there, do that, edit in FCP normally and then when you're in Compressor, export it as a H.264 file. It should already be progressive so you can leave your frame controls off; just mess around with your bit rate if you'd like. I think 4000-5000 kb/s is more than enough for SD. If the footage is interlaced, you need to turn your frame controls on and change the output to progressive. I would leave the other settings 'Better' as 'Best' is more processor intensive. I never up'd my SD footage to 720/1080 as I was worried it would degrade the image. There are more things you can do, but deinterlacing your 60i footage and having the best bitrate (keeping file size in mind) are the usual starting points.