I converted some XVID into SVCD and tested them by playing them on my Sony Plasma TV using Phillips DVP642. I was very surprised to learn that the converted SVCD had way better quality than the original XVID. I know the SVCD had higher bit rate but shouldn't the original source be better regardless of format? Could it be that it has something to do with my TV upconverting everything to the fixed resoultion?
Better quality is very subjective. It depends greatly on what types of imperfections you notice the easiest and which ones bother you the most. Depending on the exact conversion method, the same type of output can give you different combinations of blurring, edge artifacts, or other imperfections that I'm not thinking of right off the top of my head. For example, if shadows on the edges of objects bothers you, a little blurring can "improve" the picture for you, while somebody else who really hates blurring might prefer the shadows. I think it would be more accurate to say that when you re-encode you can't re-create details that aren't in the original, although with some sources your encoder might be able to make some good guesses and come pretty close.
