Horrible stuff happening in my raw footage

[coltonvisuals]

My settings were
.mlv
2:35:1
1856x790
converted in magicraw
edited the DNGs in ACR(This is where I think something went wrong)
than brought into FCP7 and added Neat Video Noise Removal.
My footage looks like this, notice all the crazy stuff happening on the right side of the frame, can someone tell me what i'm doing wrong and how to fix/prevent this?

http://youtu.be/lRaMdRYYsZ4

[Levas]

That is called posterization.

Could be caused by (too much) compression on the final output file (or too much compression on output between ACR and FCP7)
Or it was already there in the source material(dng's), and you made it extremely visible by bringing up the exposure in post or lifting the shadows too much in ACR.