Paul-
It's very interesting to here you say you get good results using the internal de-interlacer of the HS10. I have been using progressive out on my player, so I will give that a shot.
I spent some time looking at the Full through and Normal Through (1 to 1 pixel) modes last night, and found them greatly improved compared to the Full and Normal modes. I thought the de-interlacer may be at the root of this, but perhaps it is the scaler?
How does 1 to 1 work? My understanding is the Full through is showing 1 pixel for every 1 pixel of the image (the DVD image say). Now when you use "full" mode, it blows up (scales) the image, and thus has to use several pixels for each item of detail in the picture, rather than 1. If this is the case, and everything looks clear and sharp in the "full through/1:1" mode, then I can assume that reason things don't look as good in the "full" mode is that the scaler is not doing a terrific job.
So in essence, if I got an outboard scaler, or a HTPC, with better scaling, I could acheive an image similar to the "1:1" mode.