How do I avoid video artifacts exporting for Final Cut Pro?

I’m using the H.264 codec and trying to create an MPeg-4 so I can play it in Itunes. I choose a bit rate of 1600, an the quality is adequate, but there are distracting artifacts around the movement in the video. Am I oversampling or something? I don’t seem to have the Variable Bit rate option, could that be a solution. I previously exported this as an MPEG-2 to burn to a DVD and it looked great. Anyone with exporting experience offer any suggestions?