"The lines you're seeing are interlaced artifacts on a progressive scan monitor. What is interlacing? Interlacing was a solution to early technological constraints - the picture show on a TV is a series of dots, but early TV tubes couldn't draw the entire picture quickly enough, resulting in the top half fading before the whole picture was shown. So rather than display an uneven picture, the screen was divided into alternate lines, with each each half being drawn alternately. Technology has long since progressed and PC monitors work in "progressive scan", that is show all lines of resolution at the same time. When you display an interlaced picture on a progressive scan monitor, you're actually seeing two seperate frames together. Where there is high movement, "lines" will appear on your screen as alternate line are showing a different image. For a detailed explanation of interlacing and how to deal with this, visit http://www.100fps.com/

You only need to deinterlace if you're creating files for display on a PC (such as WMV and DivX encoded files). An exception to this is MPEG2 for DVD: software DVD players will have an inbuilt de-interlace filter for playback. When encoding DivX of WMV files, simply apply a de-interlace filter in your encoding application. This is sometimes refered to as "progressive scan" output"."
I dunno much, but so it says in the FAQ...