Thanks so much Rafael, and my apologies for taking so long to reply to your advice.
We were indeed watching this footage on LCD monitors, and finally had a chance to preview it on both a computer CRT monitor and a standard TV broadcast monitor with the same results – the interlace lines were gone.
We also took your advice and did some tests from Compressor in which we compared the same frame of video between a .dv NTSC clip, the same clip converted to PAL .dv (with the Nattress plugin), and an MPEG-2 version of the latter created in Compressor. We found the interlace lines actually appearing following the Nattress PAL conversion, which were of course made worse following the MPEG-2 compression of that converted clip. Why would that be? I thought those lines would have appeared in the original NTSC .dv capture, which is usually interlaced, right?
Furthermore, we actually found that when we simply created a PAL sequence in FCP and rendered our .dv clips to the timeline before exporting as PAL .dv, we got better results across the board – the interlace lines were gone, and did not appear on an LCD monitor nor on a standard TV set. Given that so many people have testified to the Nattress plugin over this cruder method for converting from NTSC to PAL, I am wondering if there is something I am misunderstanding here. Any light you could shed on this would be appreciated.