Hi scorpio_fish!
There are many different ways you could compress your video in Compressor for better results and higher quality. The main limitation in the preset you used is the data rate. Unless you are trying to keep the file size really small, use a higher data rate.
For your standard def video, try a data rate between 1500 and 3000 Kbps. You can change your data rate in the Encoder portion of the Inspector. As for presets, try the Web>QT 7 compatible> H.264 LAN. You can try the default data rate with this preset and see if you like the result, or in the video settings area of the Inspector Encoder section change the Data Rate restriction to 2000 or 3000.
Another preset option is to use the Apple Devices>H.264 for Apple TV preset, and in the Encoder section of the Inspector select Apple TV SD for your Device setting. If you don't want this file to open in iTunes as the default application, you can change the default application to Quicktime Player by selecting the file on your desktop after encoding it, using "Command i" to bring up the file information, and changing the default application to Quicktime player.
Many more ways you could encode this for better results, recognizing that the trade off for better quality is usually a higher data rate and larger file size. Play with these variables and see what works best for your particular video.
Hope this helps!
- Mary Lynn