Poorer video quality with new version. Please help!

[joncar]

I used to have the 8.4b version using Windows Vista and was pretty happy with the quality of the stream output. I do a live webcam show with a logitech 4000 for my website. Now i upgraded to the new 8.6b and the video quality is poorer, especially pixelated. I noticed one difference though...when i start the stream and the local playback window opens, it opens at about 1"squared rather than opening at about 4"squared likei used to. So naturally i drag it open to about 4" and that where i see poor quality. I also noticed under on the VLC player>view>stream and media info, it says the resolution is 160X120, which is way too small. I', gureesing this is the problem but dont know how to adjust it. Any help would be appreciated.