If you generally apply and scaling to your captured video, there will be some degree of blurriness or fuzziness as pixels will get shifted to compensate for the different output size
First, make sure that your "Capture Area" size and your "Output Video" size are the same. (Your recording at a 1 to 1 ratio). To do this Set your capture area (what you want to capture) and then choose the Same as capture size option from the gear dropdown just above Output video in the toolbar.

You can verify this by opening your Performance monitor in iShowU HD/Pro and reviewing your settings.
Pressing "Shift+Option+Command+P" will bring it up. Or go into your iShowU HD menu and click "View"and select "Show Performance Monitor..."

For a explanation on the Performance Monitor, what it does and why it's relevant. Click Here.
In your Performance monitor check Task: and verify that your Output Area dimensions match your Capture Area dimensions.
Please check your Compressor Quality settings. For certain codecs such as H.264, MPEG-4 Video or Apple Animation, you have the ability to set the quality via the slider. As a general rule, the higher your "Quality" rate, the better your video will look visually, and will yield a larger file size. Conversely, the opposite is true the lower you "Quality" rate is.
Note: When using Apple Animation, if set to "Best" or 100% it is lossless. Any number or setting below that and quality will begin to degrade. (0%-99%)
You would use this capture codec to conform to other DV footage if you intend to take your recordings to an NLE. When previewing captured videos with this compression codec, if the video looks fuzzy, go into your Quicktime preferences -> General -> In Movies: Check "Use high-quality video setting when available.
