It sounds like you are experiencing improper de-interlacing. I know that in PPro CS4 interlaced DV-AVI's will play fine, but if I try to play the files in Windows Media Player the image will be full of a combing effect. Think of what a TV screen looks like if you put a comb over part of the screen and just watch the area with the comb. But it's not just SD material this affts; I've downloaded TV shows from iTunes that we're obviously shot in 1080i, and were not converted to Progressive correctly (iTunes MP4 files are natively progressive). There's not much you can do: if you do a software de-interlace you are throwing away half your image whereas a hardware conversion will give you an image that looks like your original, but in progressive.
