I get a motion distortion, where moving subjects become "wavy" during movement, when rendering to DVD from VHS. I used a JVC camcorder as an analog to DV pass-though converter. DV stream was captured in Vegas, files edited, prepared to MPEG2 in the DVD Architect template and separate audio WAV. Rendering was with DVD Architect.

The motion distortion waves do not become apparent until the final DVD, and is present whether viewed on a DVD player or computer. I tried this twice, the second time, the problems were worse (I used VDub-inspired Dynamic Noise Reduction and Smart Smoother filters for Vegas hoping it might cure the problem).

I'd appreciate any help.

Try using upper field first in your setup and check your de-interlace settings. They are probably wrong for your movie.