I bought and installed it.. I can't tell for sure if this is fixed or not. I guess it looks smooth at 50% speed, but its hard to tell. It doesn't look fantastic, but it could be my low quality 60fps video clip though... it may be fixed.

Would love to know for sure.. or how to tell.
I noticed that the 'properties' of the clip in PD10 shows 60fps. That doesn't necessarily mean its using all 60 though.

I have only the trial version, so I can't test AVC-HD video. I do have MPEG-2 that is 1920x1080, 50 fps progressive and each frame is numbered in sequence using a counter. When I change the speed of the video clip to exactly 50%, all the frames are there. I can advance each frame in the preview window and see that all the frames are there in order. When I produce a file at 25 fps progressive, all the frames are still there. No frames are missing.

Gateway DX4380, AMD A8-5500 Quad Core 3.2GHz with ATI Radeon HD 7560D; 16GB RAM; 1 TB SATA 7200 RPM; Windows 8 Pro 64-bit; PDR11, PDVD12.

That's very promising! We'll call it fixed unless we hear otherwise.

I wish they would improve the text and text affects though. PD videos definitely have a PD look and feel which I try to get away from.

I don't know. I still think the slow mo in PowerDirector is dropping the frames. Here's a comparison of the slo-mo options I made in a short vid demonstration:

http://www.youtube.com/watch?v=fBS0tB7Vym4

Video Speed .5 should be perfectly smooth. Maybe I need to try with a different clip.