[MacDV] Splotchy color

[CFlatow]

Hi,

I mostly lurk but finally starting to do a little low-level DV.
I've taken a VHS recording (home movie) and digitized it through my 
ZR-10.
I am viewing the DV in iMovie3. I am saving it as "self-contained" QT 
movie.

It appears (in iMovie) that the video has shadow detail where there was 
smooth darkness before.
This is not a good thing, since it looks mostly like noise.

But the really bad  part is that the skin tone of a Hispanic child now 
looks really splotchy instead of smooth beige. It has seemingly random 
yellow patches. Again, this looks like noise.

Is this likely a limitation of my hardware, software, the process of 
copying or a combination of all?

Thanks,
Carl