Thanks for the response. Trying out JES Deinterlacer's functions on the video material and inverse telecine functions on the main movie, beginning to understand how you all have squeezed out clarity from the laserdisc captures, which alluded me before.
This knowledge will come in useful on the next project, when I will definitely be dealing with every known movie and tv presentation and compression formats under the sun.
Another reason for not going overkill with the interlacing issue is the DVD overall is going to be highly compressed. For the Billy Dee Williams segments DVD by themselves, maybe i'll proceed with attempting to improve their quality through various processes.
One day i'd like to make a parody movie of SFX, just spoof every FX shot with intentional screw ups, faulty mattes, layers in the wrong order, incorrect compositing, image maps change objects, now i can add de-interlacing film material to the list...