I had some trouble getting Blender to render with the same quality output as the input video. Granted the high-motion quality was very crisp to begin with, but in comparison, the result here is terrible in high motion. Even right after I imported the video, their were the same weird blocks on contrast lines that where everywhere along with increased saturation. Anyway, the VSE is still fully capable as long as you have a high quality video to begin with.
Rather than killing myself over it, I called it a day on trying to figure out how to render it properly.
What video container formats, codecs and bitrates are you using for the original and edited videos? Sometimes editing videos is a tricky business in the same way editing jpeg pictures and saving them will result in more “jaggies.”
Both the original and edited videos had H.264 codecs and a format of MP4. The original bitrate was around 2400kb/s and I rendered it at around 2700kb/s. I also made sure that the resolution was the same 1080*720, I mixed up 1080p and 720p when I set to stream, before I imported the video. Everything else was left at default.
Make sure that you match the sequence settings to source BEFORE you import the video. Otherwise Blender will continue to scale the image.
I doubt that the ffmpeg h264 codec is much good really. Most power users would suggest rendering an image seq then muxing it together in another app.