I've tried improving the video quality on VirtualDub, using the filters MSU Smart Deblocking and MSU Cartoon Restore (the old version, the beta will crash virtualdub)
I have used these settings:
VirtualDub.audio.SetSource(0);
VirtualDub.audio.SetMode(0);
VirtualDub.audio.SetInterleave(1,500,1,0,0);
VirtualDub.audio.SetClipMode(1,1);
VirtualDub.audio.SetConversion(0,0,0,0,0);
VirtualDub.audio.SetVolume();
VirtualDub.audio.SetCompression();
VirtualDub.audio.EnableFilterGraph(0);
VirtualDub.video.SetInputFormat(0);
VirtualDub.video.SetOutputFormat(7);
VirtualDub.video.SetMode(3);
VirtualDub.video.SetSmartRendering(0);
VirtualDub.video.SetPreserveEmptyFrames(0);
VirtualDub.video.SetFrameRate2(0,0,1);
VirtualDub.video.SetIVTC(0, 0, 0, 0);
VirtualDub.video.SetCompression();
VirtualDub.video.filters.Clear();
VirtualDub.video.filters.Add("MSU Smart Deblocking 0.8");
VirtualDub.video.filters.instance[0].Config(1,1,1,1);
VirtualDub.video.filters.Add("MSU Cartoon Restore 1.3");
VirtualDub.video.filters.instance[1].Config("bilateral", 1, 5, 0);
VirtualDub.audio.filters.Clear();
copy this into a txt file, then rename it as a vcf and load it into virtualdub
using my settings the above frame (30272) comes out like this:

what do you guys think?