Problem converting my HD .mov file into another format. HELP!

Hi, I own a Sanyo HD camcorder that shoots in 1080i. I have a .mov file imported to my computer that I have been attempting to convert into .mp4 but when I use ffmmpegX to convert it ends up with half the screen distorted. I've resized the video to 960x540 in Quicktime but it still ends up this way.

As a .mov video it plays just fine. And when I imported it into iMovie (I have the latest version) it does not create thumbnails. What's happening here? Is it because of the HD quality I'm having these problem? And what steps do I need to take to rectify this so that I can convert the video to another file format and, publish it on youtube or vimeo?

Any answers and specifics would really help, as I am not advanced on these issues.

Thanks,
Michael

Worked! It's that easy? Wow, I was struggling with this for awhile. Okay, now let's see if it compresses into Vimeo no problem. Thanks man!