You may find that videos are blurry in your published output even if you increase the video quality to its highest setting (9) when you publish.
We improved video quality in Update 2 for Articulate Studio '13. To take advantage of the new features and fixes, download and install the latest version from the link in your product confirmation email, or get it here. Then republish your project. For even better quality results, delete existing videos from your project, import them again, then republish.