Yes I just tried deleting the newly rendered files and it also does the trick. Thanks.it might be utilising those newly rendered files in subsequent edits. If so try deleting those files before making a new render.
To put in perspective, I normally wouldn't notice this problem, as I am normally making substantial edits before rendering. However I was testing out all sorts of .wmv render quality settings on one single project and the final file quality would deteriorate faster than I could increase the quality settings. Definitely some sort of logic flaw somewhere. Again this is VS10 that I'm using.