In compressor in FCP studio 2 MPEG 2 when compressed in that format comes out grainy. If I purchase Roxio or Toast will it come out clearer? And if something is compressedin Toast can I send it to DVD Studio Pro and create my DVD menus and chapters?

Compressor's Mpeg2 encoding is very good, not the best, but very good.
I only ever use Toast to encode and build DVD's if I want them quick and dirty.

Have you played with compressor to get the most out of it?
Use the two pass preset at the highest possible bitrate for your project.

I expect your footage is noisy, or you've used an inappropriate setting.

Duncan.