For the best results, follow these steps when exporting from FCPX:
- File > Share > Master File…
- Go into "Settings"
- Set Format to "Web Hosting" for DVD, USB and online delivery. Set Format to "Computer" for Blu-ray delivery.
- Set Video Codec to H.264 (either Better Quality or Faster Encode, depending on how long you want to wait. Quality difference is minor.)
- Set Resolution to the same as the source video (usually 1920 x 1080)
- Check 'Include chapter markers' (for a future feature, not currently supported)
- Click 'Next'
- Choose where you want to save it, then click 'Save'
- Alternatively, you can use Compressor or Handbrake to fine tune the bitrate and other settings.