Hi there
When I have to convert pdf's, I use Mobipocket creator. Seems a lot better to me. First I use mobipocket to convert the pdf, then I add the converted books into calibre, and go from there. A bit more work, but better results for me.
You can get mobipocket creator here for free:
http://www.mobipocket.com/en/Downloa...sp?Language=EN
Some of the guru's might have better solutions, though.