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I can digitize my own VHS videos and have been doing it for years. Digitizing 8mm requires equipment so we hired a company to do it for us.
This is what we got back:
On the TV I see this

My email:
Hello I received my DVD with the Super 8mm transfer. The footage has bad interlacing. One of the reasons we picked XXXX was because of its interlacing process. But now I wonder if I may have misread the process?
This is what we got back:


On the TV I see this


My email:
Hello I received my DVD with the Super 8mm transfer. The footage has bad interlacing. One of the reasons we picked XXXX was because of its interlacing process. But now I wonder if I may have misread the process?
"Most services use a process called interlacing to adjust the speed of your film for television; the problem is, interlacing can cause annoying visual problems in some players when you play your DVD on your computer. Because we think you should be able to enjoy your movies on your computer too, we use a technique that will minimize those problem"
"Then we will prepare your order for television viewing by manually retiming the digital file, without the use of interlacing or pull-down."
The interlacing problem shows up when the footage is played on both a DVD player and on the computer. If the video had been properly encoded, the the DVD players and TVs would automatically "interlace" the analog source and I would not see artifacts. And if your technique had worked, I also would not see interlacing on computer playback. The fact that the interlacing is showing up on *both* the DVD player and the computer playback means something is not working.
As a side note: we tested the DVD on two DVD players and TVs - an old standard DVD player/analog TV and a newer DVD player and LCD TV. The results were the same.