After I add the Alpha Over png file to my VSE it is pixelated. Maybe you could have a quick look into the files and show me my error:
Thanks in advance! Appreciate any help.
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In the filter layout, try setting the "Convert to Float" value to True. Also try Enabling "Deinterlace". Put the Text image over your black color and make sure it's blend mode is set to "Alpha".
Your Example Blend files didn't have the text images in them, so I couldn't make sure my advice would help.
It could also be that your text image isn't high enough resolution.