Well it's not the camera that's causing the interlacing. The Canopus device is DV format, which is natively 720x480i. Also, you say the server is converting that DV AVI to 640x480 to stream. Is there any settings in that server to deinterlace while it's changing the resolution? If you can't do it that way, is there any reason you couldn't just get a 50 dollar usb 720p webcam to use? That would eliminate the whole camera ->capture device connection.