Why are you sending 1080p60 from the HTPC when you play a Blu-ray movie? You are injecting judder in the image because 3:2 pulldown has to be added to the Blu-ray disc that is encoded as 24p. To see artifact-free motion from a Blu-ray movie (well, such as it is, 24 fps is a damn slow frame rate which CAUSES blurry motion that we have been CONDITIONED to think looks better than unblurred (or less blurred if you prefer) motion from years of looking at 24 fps in movies).
When you play the movie at 24p, each frame is doubled or tripled or quadrupled by the display (varies by display/manufacturer) so the display operates at 48, 72 or 96 fps without anything added. The addition of interpolated frames does NOT cause motion artifacts. But it does cause motion to appear sharper... more like what you experience in direct-to-video photography. In fact, the addition of interpolated frames makes motion look smoother AND sharper, with no added jumpiness. The interpolated frames may even be sharper than the movie frames because of the way the interpolated frames are calculated. (you can have a shot with a still camera of a race car going by so fast that the car is badly blurred in every frame. Interpolated frames can make the tires appear sharp as well as revealing previously undetectable detail in the car (like advertising, etc.) so you see motion with more detail, not less and not judder-y motion.
The primary reason for the existence of Game mode is to reduce input lag to an absolute minimum so what you see on the screen is not slightly delayed so your actions with the control come too late to accomplish what you want to accomplish. Input lag is reduced by removing processing (typically) which means you may end up with worse-looking images that don't have as much "lag" as other modes. This "lag" does not affect the quality of motion... it is simply an unwanted time delay.
It sounds to me (from reading what you posted here) that you are attributing a problem with un-smooth motion to frame interpolation which should be impossible unless the frame interpolation feature is broken. It was NOT broken in the Quattron I reviewed in 2011 (925 series). So it has me wondering if you are simply creating the motion issue by NOT using 24p playback for movies encoded as 24p and/or forcing 30 fps or 60p content to 24 fps which may be possible in some systems (and that also causes motion problems). Frame interpolation is not intermittent... it works constantly to insert 1 or more frames between each original frame... assuming there is 1 added frame and the object in motion is on the left of frame 1 and at the right of frame 2 of the movie, the interpolated frame (let's call it 1.5) creates a new frame with the object in the middle of the frame... that does NOT cause jerky motion, but frame 1.5 is often sharper than frame 1 or frame 2 so motion will look sharper (more like a video camera). If 2 interpolated frames are added the sequence might be frame 1, frame 1.33, fram 1.66, frame 2, etc. Without frame interpolation, you'd simply get frame 1, frame 1, frame 1, frame 2 (if there was no frame interpolation AND if 3:2 pulldown was not added). When you play 24p content at 30 fps or 60p, you FORCE frames to be repeated in an uneven sequence like this:
1 - 2 - 3 - 4a - 4b - 5 - 6 - 7 - 8a - 8b (every 4th frame is repeated 2 times).... that DOES cause visibly jerky motion if you know what to look for. If you play the movie in 24p all the way through to the display, you get 1 2 3 4 5 6 7 8 9... etc with no unequaly duplication of frames. If the display has a 120 Hz refresh rate, each frame is repeated 5 times.... 11111 22222 33333 44444 55555 66666 77777 etc. The only time anything disturbs motion (unless the display has a design or firmware problem) is when you play 24p content at 30fps/60p or when a product has a mode that is supposed to remove 3:2 pulldown from a 30fps/60p (example a DVD or a movie shown on TV) source and it is not done correctly (that can get quite ugly and jumpy).