Why? Premiere CS4 Keeps trashing my videos??

[MAtkins]

I shot a vid in AVC High@L4.0 1920 X 1080 (16:9) 29.97 fps according to MediaInfo
The raw vid is an mts file.

I wanted to downsize to 560 X 315 (16:9) which is the same proportions as 1920 X 1080.

I created a Premiere project using NTSC (Desktop) and the same dimensions with 'square pixels' selected.
I had tried 16:9 widescreen but it displayed a different size than my vid <scratch scratch>

I export to H264 format using NTSC codec aspect ratio is 16:9 (I tried square pixels too and saw no difference).

When I create the mp4 file it looks terrible in comparison to the original.

Is there anything I can do to make Premiere not trash the quality?

Maybe scrap Premiere and use something else?
I need to take a small clip out of the entire vid and scale that down to 560 X 315.
I was hoping to get to glue a few different vids together with some transitions too.

I'd be all set if Premiere wasn't so set on destroying the vid quality.

[Marc Peters]

I would edit in the native format, and then export to your desire settings. You don't need to create a new project type.