The quality of the video you want to play is directly influenced by the codec used to encode the video file and the renderer available in KMPlayer. To access it, right-click inside the player's window, then go to Options > Preferences (or F2) > Video Processing > Renderer. By default the renderer is set to Enhanced Video Renderer, but I suggest you change it to Haali's Video Renderer and it's best to keep the Video Scaler to Bilinear. You can try decreasing it using the drop down menu, but if you experience playback glitches, switch it back to how it was.
Of course, you can use other processing filters like Sharpen, Soften and Post-Processing. Post-Processing plays a major factor as well, but if you don't know how to use it, simply drag the presets bar until the image looks better.