We’ve shown many quality comparisons here of the poor downscaling quality of the Adobe Media Encoder across multiple versions.
Todd Kopriva of Adobe has recently made a post that answers some of the many questions as to why the quality has been poor in the past, and how to make it look excellent in CS5.
The answer? Using a CUDA supported card with Premiere CS5.
Read more to find out: Scaling in Adobe Premiere Pro CS5
He provides the details for which algorithms are used for each export settings. Very good read for those who are interested!