Interlaced Video in WMP playing with green artifacts on lower half

I went into Encoder, captured and compressed using WMV9 Advanced Profile-
checking the Interlaced processing box. Processing tab- Maintain Interlacing.
Captured a brief 1 minute video. Played the video back in WMP 10 and saw the
bottom half of the screen was full of vertical green and pink lines all
flashing constantly and slightly transparent. The video was playing at a very
silky smooth rate, though. In WMP options, under performance, then hardware
acceleration, then video acceleration, "Use video mixing renderer is checked
and Use overlays is. Use high quality mode is not checked. I found that I
could lose the green distortion, but the framerate wasn't that silky smooth
any more. The framerate WAS constant and jerk-free, but it appears the "use
overlays" helps the framerate boost to 60 fps, which I believe is what a
normal live tv show is taped at, considering it's interlaced. Not sure
though- correct if I'm wrong.
So, and another thing- i have an ati video card- using tv out, i have the tv
cloning a copy clone image of the pc screen, and when a video is played, the
video is supposed to be then automatically fullscreened on the tv, which is
called Theatre mode. If I use overlays checked on WMP, the video will go to
fulscreen, but if I don't check overlays, the video will only play in a
windowed mode on the tv. I CAN fullscreen it by doubleclicking, however,
that's another issue- I have to have my desktop set at 1024x768 or less. Why?
Because the tv's maximum desktop are is that resolution- I like my resolution
at 1280x960 and the tv out on the ati card does this thing where it shifts
the screen to where the mouse cursor is located so you can control which
1024x768 area the tv is displaying. When I fullscreen the video without
overlays checked, the video shows up as a bigger area than my tv at 1024x768
can display, so convenience here is basically the focus- I can use DiVX
player to watch WMV9's that are interlaced, and the ati card does the
fullscreen theatre mode correctly, but the framerate looks like it's not as
fast as the interlaced source video was.