When DV movies are rendered or imported, they are created with a default High Quality setting turned off. This setting allows these movies to be played back at higher framerates with no additional decompression hardware by lowering the apparent video quality displayed by the monitor. This is only a display setting. The full resolution of the video track remains untouched, and can in fact be toggled to display the movie's full resolution, although playback with the High Quality setting turned on will result in dropped frames.
This setting can be accessed by anyone with QuickTime Pro (users of Final Cut Pro already have this license, others may purchase one at the QuickTime web site). With your clip open in the QuickTime player:
As you toggle back and forth, notice how the movie goes from jagged to sharp.
If you leave High Quality toggled on, you may be asked if you want to save this clip when either closing it or quitting out of the QuickTime Player. Saving at this time will only preserve this setting internally to the file, and will not do anything to change the video track itself.