HD video encoding using WME

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I would like some advice on HD video encoding using the WME or WME SDK.

What I got is a HD capture card with max encoding resolution 1920x1080i. It
only has a DVI input connector. We plug a industrial survey-type HD camera to
the card, then start up WME, setting the appropriate profile settings, etc.
When we have the preview picture on screen, the quality is pretty
disappointing: everything shot by the camera is not sharp at all as we'd
expected somewhat like a blue-ray quality; it looks like from a cheap
conventional SD camera. So, is WME just not able to cope with the HD
encoding, or do I need to do something about WME?

.

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