Still images in in video.

[Jungle Explorer]

Hi,
This is my first time here. I have used Video Studio for years and have been very satisfied with it. I am currently using version 7.0. The only problem I have had with it is the quality of still images when inserted in into a video clip. They look fine in the preview window but turn out very pixilated after final rendering. This seems strange to me since I am using extremely high quality 5 mega pixel digital photos. Another thing that really confuses me is that low quality GIF animations turn out looking better then the originals even though they were stretched to fit the video output size. Can anyone tell me how I can improve the quality of still images in my videos? Thanks