I shouldn't detect any significant quality difference when I do this, should I?
Well, I'm detecting a significant quality difference. On that I haven't seen before. I recently upgraded to a 128kb video card. Is it simply a case of it being more sensitive? Any other ideas?
MPEG has finer color detail at the expense of image detail. DV compresses color more in order to retain more image detail. Since you've gone from MPEG to DV, you've sacrificed both color and image detail. You will probably notice significant loss and artifacts in strong colors, edges of contrasting color, and diagonal lines.
I doubt your video card has much to do with this at all. Most any video card made in the last 6 years or so is probably good enough to show all the detail.