well is there anyway of improving the quality as it is. I have just moved from crt to the imac screen so the pixelation shows up a lot more
Like photography, you can not create detail where there is none.
Originally the divx was made from, say, a nice fat HD file.
Creating the divx tossed out about 50-90% of the actual information contained within that HD movie, and yet it still looks pretty good. Not HD, but good.
If you wanted to do the reverse now, with only the divx, youd be trying to recreate something with only 10-50% of the information. Its impossible.
You can not increase quality on compressed files, I am sure there are huge expensive filters that take tons of CPU power, that could theoretically fix the missing info, but I doubt its available or that good. though i think they have one for images...
I have just moved from crt to the imac screen so the pixelation shows up a lot more
the pixelation you are seeing is not because you went fron CRT to LCD, it is because the resolution is different and you are most likely finding more screen real estate with your iMac because it is physically larger and has more pixels. In other words, its blowing it up more than before.