When you preview video on the timeline, and you find the preview quality is not as good as when you preview it in the library, please try the following:
Select higher preview resolution The default resolution is set to High Preview Resolution. If you have PowerDirector 64-bit version, you can select Full HD Preview Resolution for better preview quality.
Disable shadow files If shadow files are enabled, the program creates mpeg-2 cache files, and the preview quality is downgraded to free up memory for editing. You can disable this function by deselecting the checkbox in Preference > General > Enable HD video processing (shadow file). If shadow files already generated, you can remove shadow files by going to Preference > General > Manual Delete and delete all the temp files.
Note: The preview quality and editing performance is a trade-off. Please note that preview quality won't impact the output result.