• If you have the monitor's display quality and/or magnification set incorrectly you will see a degraded view of your clip. Your magnification should not be greater than 100% (for general use) and if your project frame size is smaller than the monitor size then the magnification should not be set to "fit", otherwise you are effectively scaling greater than 100%.
  • See Source and Program Monitors overview in the Premiere Pro CS3 Help.

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