distortion in my photoshop background

Hey everyone. I'm creating a background in photoshop for my DVD studio menu. On the background there is a company logo that has a circle outline. The logo looks sharp in photoshop but when I import it into DVD studio and add it as the background, the circle is distorted. Instead of it being a smooth circle, it has a few jagged points. What could be causing this?

It is an SD widescreen menu. I've tried every type of file out of photoshop.

thanks for any help.

Compression can cause aliasing artifacts as well as viewing at other than 100% magnification.