Quote: I would have thought that in a digital world it should not lose any quality

The quality of the output is dependant on what format and the profile you choose.

There are profiles in Produce that range from low resolution (352x240 at 2Mbps) to 4K resolution (4096x2160 at 50 Mbps).
You should choose a Format and Profile that is similar to what your camera outputs.
Carl312: Windows 10 64-bit 8 GB RAM,AMD Phenom II X4 965 3.4 GHz,ATI Radeon HD 5770 1GB,240GB SSD,two 1TB HDs.

thx, never noticed that before

Which format would you recommend for my case: I am making political speeches using a $300 mike+ processor for audio, and Microsoft LifeCam for video. my goal is to eventually reach out to millions with these videos, so I don't want it to be low quality but I also don't want to waste too much space/processing time

Quote: Which format would you recommend for my case: I am making political speeches using a $300 mike+ processor for audio, and Microsoft LifeCam for video. my goal is to eventually reach out to millions with these videos, so I don't want it to be low quality but I also don't want to waste too much space/processing time

That depends on which LifeCam you have.

http://www.microsoft.com/hardware/en-us/webcams#n
There are three models.
A 1080p LifeCam Studio
A 720p LifeCam Cinema
And a 720p LifeCam HD-3000

If you have a 720p model You should try the MPEG-4 1280X720/30P (9 Mbps).

If you have the 1080p LifeCam Studio, you use either MPEG-4 1920X1080/30P (13 Mbps) or AVC H.264 AVC 1920x1080/60i (16 Mbps)

If you want smaller files sizes use WMV:
Windows Media Video 9 1280x720/30p (6 Mbps) for 720p cameras.
Windows Media Video 9 Full HD 1920x1080/30p (10 Mbps) for 1080p LifeCam Studio camera.

There are several choices, you choose which fits your use and needs. On top of the Default profiles you can customize MPEG-4 profiles to suit.

You can also use Intelligent SVRT, to create a profile that matches your camera output.

You have lots of choices, try each one and decide which fits your needs.
Carl312: Windows 10 64-bit 8 GB RAM,AMD Phenom II X4 965 3.4 GHz,ATI Radeon HD 5770 1GB,240GB SSD,two 1TB HDs.