Ok, so I decided to take a crack at converting the MVE files from my FS2 discs. I got the tools I needed, then copied the MVEs to my hard drive. I have managed a conversion of intro.mve that is...acceptable. It's better than the preconverted version I downloaded a while back, but I'm seeing some pixelation, but it's rather large. It's not as obvious in some parts of the converted file, but it's always there.
I was wondering if anyone had run into this before and if so, could you please give me some tips. I'm sure the first question is what program and what encoding did I use, so here's the answer in advance. After converting with MVE2AVI, I used VirtualDub and saved with the Xvid codec, having set it for highest quality.
EDIT: I changed screen res to look at it again in 1024x768 and it looked different. Pixelation still there, but it looked smaller than before. Not nearly as obvious.