Thats how they come out on Fraps.
Fraps has a PNG option for screenshots, just switch from BMP to PNG.
UGH, FFS, I REALLY . REALLY. REALLY. HATE when developers do this. Render Cutscenes using in game engine. Encode Shitty. Don't use AA or use really shitty AA.
This is 2014 nearly we should be past stuff like this
My sentiments exactly... Never understood the reason to do this - always looks crap compared to real-time and even takes up more space as it is a video file.
I mean, there is legitimate reasons for this.
A lot of times they want to do things in cutscenes that they can't reasonably do realtime in game.
They usually add a lot of effects to cutscenes, like the custom depth of field in the example I originally quotes, and it's definitely not uncommon to see explosions and things like that in cutscenes.
On some computers, rendering cutscenes would be too demanding and it would be super choppy.
By pre-rendering they can assure everyone gets to have at least a smooth experience with it. (As for why they don't do things like turn on super AA or something like that - no clue but they should.)
As for why it's low-bitrate, that stuff can get HUGE very quickly. High bitrate video's take up many GB's of data. If your game has a lot of cutscenes or a lot of long ones and you're going pre-rendered then high bitrate vs low bitrate could be the difference between a modestly sized game and one that takes up 2 or 3 times it's own size.
I'm not saying I think pre-rendering the way developers do is the only choice or the right choice, I'm just explaining their rationale and showing there is some definite understandable logic to it.