I just finished running some short tests with 1280x720 video and 16:9 pictures (in JPG format) and I've determined the following:
1. The first still of any grouping of stills looks highly pixelated while the others (if there's more than one pic in the group) normally look fine.
2. It doesn't make any difference if the still is the original resolution (or aspect ratio) or has been resized (or cropped) to be the same as the video resolution.
3. It doesn't make any difference if I'm using the native MPEG4 or H264 encoder. * See my best solution below
4. It doesn't matter if frame rate is 15 or 29.97.
5. It doesn't matter if there's no transition between a clip and the still. * See my best solution below
6. It's much worse in HD. Saving the movie in 640x480 normally doesn't have the issue as far as I could tell though once it was obvious for some reason.
BTW, I'm using v2.41, not the newer ones everyone seems to have issues with.
So far my best solution is to use H264 encoder but I must increase quality level to 28 from the default of 32 AND I must use fade instead of my preferred crossfade for all first stills after a video clip (or start of the movie). It takes much longer (over 4x) to encode, but MPEG4 just plain doesn't work. It was also 33% larger.
So this is really no solution because that's not acceptable. Not sure what to do other than leave the stills out but that detracts from the trip report.
Any other suggestions???