Michael,
I have used both RGB and 709 and both looked washed out before I even import them into Media Composer.
I took this screenshot as an example:
The frame in the lower right is the original file encoded as Apple HDV. The one on the upper left is DNxHD encoded with MPEG Streamclip de-interlaced. The one in the lower left is interlaced scaling. The one in the upper right is encoded using Quicktime Pro.

I’ve also tried non-interlaced and just about every combination of everything… no dice. I want to love MPEG Streamclip, but this is a deal-breaker.