I suspect that the reason is that by saving the project (i.e. finishing the movie) as "best quality for this computer setting", the movie is being encoded as a .wmv file (and thus compressed).
To get this onto a DVD you are then presumably using 3rd party s/ware, which again encodes film into DVD format and I suspect that this in part accounts for a loss in quality. I think the reason that the preview is nice and crisp is that MM2 is using the original uncompressed files for the preview as at that stage you haven't finished the project and created the movie file.
One thing you could try is saving the movie to your computer as an .avi file. When you get to the 2nd window of the "Save Movie Wizard" you should get a button, "Best quality for playback on my computer". Immediately below this should be "Show more choices...". Click that and you get 2 more buttons, one of which is "other settings" click that and you should get a drop down showing a whole range of choices one of which is DV-AVI (PAL).
You could then use the relevant s/ware to burn to DVD.
One word of warning .avi files will be huge, so make sure that you have plenty of HD space (for eaxample I have a 6 min video that I have recently beem working on consisting of the raw footage, a couple of transitions and a soundtrack and the file is 1.19GB and a 4 min slideshow with rolling introduction and credits, transitions and soundtrack is 857MB!
One site that it might help to have a look at is click here as there is a wealth of useful stuff and other links on there.