I found that film mode made no difference with the quality of picture using a progressive scan DVD player, so I just leave it off. If you have a non-progressive scan dvd player you may try hooking it up and watch a dvd with film mode on to see if the horizontal line appears.
You could ask Sharp but I dought you will get the answer your looking for. It could be a issue with the compoenet input, it could be a issue with film mode when using a progressive scan dvd player, or it could just be the film mode option itself not handeling 3:2 pull down like it should. Either way turning FM off fixes the issue when watching dvd movies.
Sony UBP x800
Yamaha Aventage A1030
Klipsch RF-82 II, Klipsch RC-62 II, Klipsch RS-52 II, Klipsch RB-51 II (Front Preference)