MPEG quality?

Hi everyone,
I have a sony DCR-HC42E miniDV handycam and it includes firewire 1394.
When I want to capture my videos by its "PicturePackage" program as a VCD file, its quality is different from usual VCD films that we look in TV.
I test "Ulead Video Studio" software, but the result was same.
Would you please tell me if I can do anything for getting better result in converting project?

The maximum video capture resolution with a DCR-HC42E is 320 x 240. If you try to stretch that out to say 1366 x 768 on a 32" TV, (or even 1024 x 768 on a PC monitor), it's not going to look very good, ('grainy').