Blur lines during motion

[Round Trip]

I am using Vegas 6. Does anybody know if there is a setting to reduce the amount of blurring when a figure is in motion?
I have several clips in which everything is in sharp focus until the characters move. Then it looks like a trail of pixelation following the subject while the background is perfectly sharp.
It doesn't do it all of the time that's why I am thinking is a setting of some sort but have not figured it out yet.

[setarip_old]

Hi!

1) What was the source for the clips?

2) What software and procedures were used to create the original clips?

[Round Trip]

I am not at my working computer now but this is approximately what happens:
1. Video and sound are recorded to a 3" mini disc on a SONY camera.
2. Using an USB cable, the video/audio is transferred to the computer using the program that came with the camera (mpgs)
3. Clips are labeled and filed.
4. Using Vegas 6, individual or group of files are imported into the timeline and edited.
5. Files are rendered after editing using the MPEG2 option (widescreen)
6. If I use DVD Architect the final product is ready to be watched on any DVD player.

As explained before, at times figures in motion look like the comic superhero The Flash leaving a trail behind them. The problem does not happen all of the time.

I am using all Sony equipment, and editing program.
My computer is superfast (dual core, dual processor with half a Terabyte of memory, 2 Gigs RAM).

I am suspecting some sort of setting on the Render option .
Does the size of the PREVIEW window have anything to do with the final rendering look? (they have 'good', 'best', 'full' and other options)

[setarip_old]

1) When you play the originial mini DVD on your PC or a standalone player, does it exhibit the same "trail of pixelation"? If so, determine if your camcorder has higher quality settings than those you used

2) If the original mini DVD does NOT exhibit the same "trail of pixelation", try setting your capture program to a higher bitrate

3) If the original mini DVD does NOT exhibit the same "trail of pixelation", try using a deinterlace filter either during or after capture

[Round Trip]

The original mini DVD does not have the pixelation!
I could not find a way of changing the bitrate. There is bitrate options under the audio but not the video properties. It does not seem to make any difference if I change it.
Under project properties there is a window for deinterlace method: -none
-Interpolate fields
-Blend fields.
I tried all three of them and interpolate fields makes it look a lot better but not totally. I was reading another thread and somebody was saying they are having trouble with horizontal blurring. I am wandering if it is the same problem.
Are there any deinterlace filters as free downloads or should I keep trying other settings?
Thanks for all of the information. Your input is really showing me how little I know.