No this is not a progressive vs interlace issue. Iterlace video does not do this either! The video is unwatchable! The defects are horizontal lines that have JUST started to appear in DVD quality video.
For example:
From "Raw Video1.m2ts" using PowerDirector 10, I make the following videos:
Raw Video1 (1080 HD).wmv (Views fine)
Raw Video1 (720 HD).wmv (Views fine)
Raw Video1 (DVD).wmv (Has horizontal structure deformities that is not do to progressive or interlace video)
This just started as well. I have had no problems before the last couple days.
tinman