I just wanted to chime in also. My MP 1.0.1 is also not deinterlacing 1080i. When I play the files with Media Player Classic outside of MP, the files deinterlace fine and the picture looks great. When I look at the same file from within MP, jagged lines appear, especially on scene cuts. I tried setting the decoder to not deinterlace and pass the interlace flag onto my tv. This works from outside of MP, but causes MP to stutter badly. I have been reduced to watching my favorite shows outside of mediaportal (I guess I could set MP to use an external player). 720p original source plays perfectly in MP.