Epiphan screen record imported to PP CS5 problems

Hello,

I am using the Epiphan VGA2PCI-e internal screen recorder to record an external device. External device is running at 60Hz and the recorder is too. I am getting a very smooth .avi clip. I used the compressor that they recommended "Epiphan recommends using ffvfw MPEG-4 Codec for signal capture."

When imported into PP CS5 and increase the scale I get this:

Basically it is blurry unlike the .avi played in WM player.

I setup the sequence like this:

Editing Mode: Desktop

Timebase: 60 fps

square pixel

Progressive scan

checked Maximum render quality

Is this a terrible compressor / codec to use?

Why does the .avi look great but terrible when imported?

Thanks in advance