My testing rig (relevant parts):
Intel i3 2100 HD2000 graphics
ASRock Mini-ITX H67 Motherboard
LAV and Shark007 Codecs
XBMC Eden standard build
I first obtained an interlaced test file and ran MediaInfo to verify that I in fact had a 1080i source.
Next I opened the file in Windows Media Center (WMC) and watched the entire clip with both LAV and then Shark007 codecs looking closely for anything that was odd or off --- especially combing which some have reported to be an issue with the Intel iGPU.
The test media was fluid and smooth and without artifact.
Next I opened the file in XBMC (I put it in a "fake" movie folder and then played that "movie" to get it to play)
At first I was happy with the quality and didn't see any issues. But I let the test file play as I did with WMC
However when fast movement was present combing was immediately obvious [***Edit: This is not accurate. See below.]
So with this information I now went back to WMC and looked for any combing in the same part of this file which again was absent.
So my conclusion is that the integrated Intel GPU can handle at least SOME interlaced media just fine. Now I know that there is some interlaced content out there that evidently it doesn't do as well with and I would be interested in trying to identify exactly what interlaced content it can and cannot handle. For how I use a HTPC (1080p, 720p and OTA 1080i) the Intel iGPU has handled everything that I --- and all of my customers thus far --- have thrown at it.
XBMC on the otherhand struggled with the same content. This for me is very disappointing as I am very much looking forward to the DVR build and hope this can get fixed before its ready for release.
Edit: Thanks to anleva I remembered that XBMC had an internal de-interlace setting. When I enabled this the playback was perfect...
So in conclusion the Intel iGPU can absolutely playback at least SOME interlaced content (and all the interlaced content that I own and watch) without any issues in XBMC and WMC. This is contrary to previous erroneous reports I have read here and elsewhere that the Intel iGPU cannot handle ANY interlaced content and should thus be avoided.
Edited by assassin - 6/16/12 at 6:15pm