I'm in the UK; my DVD player will do on-the-fly conversion to play NTSC as PAL, but the playback is jerky. If however I set the player to Auto, so NTSC is output in its native format, the TV will switch from 50Hz (PAL) to 60Hz (NTSC) and playback is smooth.
Similarly for those of you in the US, I would think that on-the-fly conversion from PAL (576 lines @ 50Hz) to NTSC (480 lines @ 60Hz) would result in loss in resolution and framerate problems. I've heard that multi-sync (50/60Hz) TVs, whilst common over here, are rare in the states.
There's also the colour signal issue. My TV can't decode NTSC 3.58 - but that doesn't affect me as I use a SCART connection in RGB mode. But if I use composite or s-video connections I get a black-and-white picture.
Anyone in NTSC-land care to clarify what exactly happens when you use one of these $35 players for PAL discs?