I'm editing a student film shot on Panasonic DV15s with Cinema Mode (basically just letterboxing a 4:3 frame) turned on. As far as I know, this method halves the resolution of the picture and causes some quality loss.

Is the grain in this screen shot, around the face, an example of this, or just from underexposure?

http://img.photobucket.com/albums/v492/vampiric-youth/Bedroom.jpg

I'm not really familiar with that camera so this is just a guess, but I'd say that noise is due to the camera itself. While it does appear to be a bit underexposed the grain is evident throughout the whole frame so that wouldn't make sense to me.

By the way is this something you shot yourself?

Grainy video is almost always caused by low exposure causing the Gain to increase. Try to eliminate, or severely limit, the Gain setting on the camera. Increase light as necessary. Unfortunately, you may need to double the wattage of the light to get severe grain/noise to disappear. Assuming you are going for an outdoor night look to the scene, your technique isn't bad but you may need bigger/stronger lights. As you know, dim lights are not what makes a scene look dark. It is the lighting ratios (amount of dark vs. light) and the angles chosen by the photographer. If you can't use any more light due to electric circuits being insufficient, start looking into fluorescent fixtures.

By the way is this something you shot yourself?

Nope, just editing it and it's an absolute pleasure. First time ever a production crew have given me beautiful footage and sound to work with. I'm a first year film student, by the way.

I'm not positive about this but it sure does look like the grain around the face is due mostly to the fact that the focus is on the tree 15 feet behind the actor. either that or the whole thing is green screen and the plate is MUCH higher resolution. I think it still may be slightly underesposed but look how crisp the leaves look, surely that isn't due to the light alone shining on the background.

Congratulations on your editing gig by the way.