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I improved the quality somewhat by forcing vector deinterlacing.
The problem seems to stem from upscaling. When I run the video at 100% it looks great. It is just really small I would expect 720 to take up a lot more of my screen. I think there is a scaling issue going on. Then when I click full screen the problem starts. Either nvidia does a far better job of upscaling SD or there is something I am missing. Because upscaling introduces all the artifacts I am seeing.