Re: “Wavy” playback with PIP
 

Thanks to everyone. I'm not sure what exactly solved the problem, but it is solved! Maybe checking "reduce interlace flicker" in combination with the other suggestions. It seems life was much simpler before HD.

Re: “Wavy” playback with PIP
 

I don't know if this is good avice or not (i.e. whether there are any downsides to it) but as a matter of course, if I am resizing any clip I always make sure 'reduce interlace flicker' is checked - and I don't get that combing effect at all. Glad you got it sorted, whatever the method!