You're right, the cutscenes are pixelated because pre-rendered custcenes can't be upscaled like gameplay can. But where the quality really shines is at fullscreen. Thanks for the feedback.
I'm going to be starting a Let's Play of Kingdom Hearts 2 soon, I've got the first episode recorded and it'll go up once I've got a few more recorded in advance. Now I know what you may be thinking; "What makes this any different than the other KH2 "Let's Plays" already out there?" Well, shut the hell up you naysayers! The difference is it's recorded in full HD, native 1080p, texture filtering, all that fun stuff. I've done as much as I can to make the game look good, while still maintaining a constant 60 frames. Compared to the PS2 graphics, I personally think it looks amazing, even trimmed down as it is for rendering. Especially compared to other KH2 videos. So if you're interested in watching KH2 in HD, check out my channel and subscribe if you want: http://www.youtube.com/user/kennethbgoodin?feature=watch
The trailer and episode one are already up, with more coming soon: