Re the diff between checkerboard and interlaced, That's what I'm finding so far. Also, checkerboard seems to be the least painful way for me to play in 3d. (With iZ3d anyway as Tridef checkerboard exhibits the same issues as passive interlaced)
I "should" be able to run without putting my TV into 3d mode due to it's passive interlaced panel, and I can, but with considerable ghosting issues which I think lie somewhere between the TV firmware and the iz3d / tridef drivers. In the meantime between iZ3d for checkerboard, or tridef for HD3d i'm fairly covered.
I'll get onto Tridef / iZ3d about these directly as I've paid for both of them, but right now I just want to enjoy my gaming rather than fault fix the damn thing 3 weeks on...
(Oh, and for the record, the firmware update for the LG 42LW450 they sent out seems to have resolved the 2d-3d conversion top / bottom cropping, but has introduced a full screen left shift resulting in a black bar down the right hand side and a hidden image in it's place on the left. Wonderful. :/
Back to gaming though: fortunately checkerboard mode adds no noticeable input lag to my gaming.
ATI's HD3d is also an option, dependent on desired experience, but it's all about the medium and/or genre as to why you'd choose different outputs.
Also of note is that it is handy to have the likes of iz3d AND tridef available, because there are bugs in one which are often absent in the other, and vice versa - though granted, sometimes they exist in both. That said, I can't personally comment on nVidia's solution, except to say I've read enough to know that camp isn't exactly problem free either.
An example of the above by the way, Portal 2 under tridef gives you the 2d water effect (seriously messing with the eyes), iz3d renders it properly in 3d. Tridef plays DeadSpace 2 better mind, at least until you turn on simple shadow projection with iZ3d. So on and so forthe.