Image Capture From Video Recording.

If the poor quality is caused by incorrect camera settings such as low video resolution, you could try to modify the settings before capturing. One way is to use DirectShow classes, but you will need some level of C++ experience, especially with using COM interfaces.
The following help topic from MSDN explains the needed COM interface that you can use to control the camera settings:
http://msdn.microsoft.com/en-us/library/windows/desktop/dd376298%28v=vs.85%29.aspx

If you program in .NET only, you can use a library that implements the DirectShow classes for you such as this one:
http://www.leadtools.com/help/leadtools/v18/dh/multimedia/mm/leadtools.multimedia~leadtools.multimedia.cameracontrol_members.html