Cyberlink does poorly with the typical interlaced format with standard def content. Pixelation is common, particularly when 'downconverting' from an HD source or zooming or cropping.
The workaround is to set up a custom profile for the 'produce' process. For Standard Definition 480 output, select progressive, not interlaced format. A sample rate of at least 8Mb is best as well, but the main solution is to ALWAYS use progressive format when producing SD content. This method produces clean looking videos while the default 'HQ' format for producing SD content is awful.
You will have to navigate a couple of menus for video and audio format when setting up your custom profile, but it is quite worth the trouble.
Then, burning the DVD from that progressive formatted file provides good SD quality as well. (Also note burning MUST be a two step process - produce the progressive file and remove the original video from the edit track; THEN reload the progressive video to the edit track and burn the disk.)
Overall Cyberlink has a number of nice features, but this is one user trick that helps solve this particular problem.