On the BV, there are five quality settings: Lowest, Low, Normal, High, Highest.
I have mine set to High. I don't really notice any pixelation (of course, I haven't been pixel peeping either). I am using a 32 gig class 10 card and the latest BV firmware on the DR500GW.
I don't think the memory card will make a difference re: pixelation. I don't know what the effects of using a card that is too slow would have. I think pixelation is caused by the amount of compression and/or the compression algorithm used to compress the video, so choosing a higher quality may solve any pixelation issues.
I have not tested this ... it is mostly an assumption ... but I would think a higher setting on the quality would influence the visual quality of the recorded video.