The VideoLAN Forums

I have several mkv files, from which I would like to record short, 2-5 minute clips, but the clips are pixelated. The large mkv files play fine, but not the clips. What can I do? Using Windows 7.
Thanks

You need to cut those files at reference frames (I-frames) only, or else you will get this problem.
I use a tool that is called Smart Renderer to to this, if you cut between reference frames it will re-encode the zombie P/B frames into a new GOP with an added I frame.
You can download a 30 day trial version of the tool to see if it works for you.

Thanks, but explain reference frames?

https://en.wikipedia.org/wiki/Group_of_pictures

Most important part:

The I frames contain the full image and do not require any additional information to reconstruct it. Typically, encoders use GOP structures that cause each I frame to be a "clean random access point," such that decoding can start cleanly on an I frame and any errors within the GOP structure are corrected after processing a correct I frame.
P and B frames contain motion-compensated difference information relative to previously decoded pictures.

So, it is very important not to break a GOP when you cut the movie because if an I frame is missing, the next P/B frames will contain relative data to an unknown reference frame (the I frame). This is why you have pixelation for short periods, until a new intact GOP is reached.