Converting to DivX and enhancing it

So, the thing is this, how can i convert a file and enhance the quality of it based on the final resolution?
For example, to try it, i converted a Mov file to DivX with WinAvi and then with Xilisoft´s video converter 3 in the resolution of 1440x900.
Both work fine, with the only problem being that it becames slighty grainy and dark, as opposed to the original mov file.
Being that i increased the resolution, shouldn´t be it become better?
It doesn´t look nothing like HD, when the resolution i upscaled to was bigger than 720p.
And if you say that it depends on the codec choosen, what is the best one to use?

 

Thanks