How can I convert .MOD files and keep the good quality?

I have a JVC GZ-MG330, which records videos in .MOD format, and the when I record videos with it the quality is excellent! But, when I put the video files on my computer the quality is horrible and it squishes the video into 4:3 even though I recorded it in 16:9. I've seen videos on the internet shot with the same camera but the quality is 10 times better. Is there a free program or method to convert the .MOD files so that they are in 16:9 and have the excellent quality that the camera is supposed to get?
 
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