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Pixelated Video? Hard To Edit



I have been editing in videowave and the preview box shows the videos like this http://prntscr.com/2fj91u


That link is a screenshot of the preview box.


Also, when recording the preview box is black, but that's a separate problem and not as 'serious'.


How can I fix that horrible pixelated effect it's giving in the preview box in VideoWave?

Is there anything I can use to convert the m2ts to mp4 or something? Won't that downgrade my quality though?

My computer isn't crappy or anything and can run anything else I guess.

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