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I'm afraid that has no solution. All PSP (prerrendered) videos are 480*272. Even if we manage to edit them without loosing quality, it's impossible to increase its quality, and when expanding such a low resolution in a big screen, there will always be a noticeable pixelization.
I don't know about that... I'm also playing other PSP games full screen on my laptop and there is no drop in video resolution in these games:
Gran Turismo
Mega Man Maverick Hunter X
Dissidia
Dissidia 012
Kingdom Hearts BBS FM
Soul Calibur Broken Destiny
There's just something about the Crisis Core videos that make them look very poor in quality on a full screen. I wonder how it is that they don't look that way on youtube when using full screen? I hope SE made the videos in Type-0 with a higher resolution like they did in some of the games above. Those videos have to be a higher resolution than those that are in Crisis Core. There's no other explanation that I can see.








