Rend,
if tmpgenc shows interlacing then yes, you'd de-interlace. depending on the way the svcd was encoded, it may already be deinterlaced, even if dvd2avi reports so.
I believe you can delete the addborders line in the script. may look strange though. the avisynth guys/gals may get into more detail.
I cheated though with a recent svcd-pal conversion. Three svcd disks in pal , {HP&TSSorPS depending on where u live
..} were 800+mb each. Very nice high quality svcd rip. I kwagulated them to , 352x240 {cuz my apex doesnt handle 352x480 without audio probz}, mpg1-kvcd vbr, n burnt to non-compliant ntsc vcd, no probs.
each file retain a lot of the quality {obviously not as clean as the dvd ripp itself} and ended up with three 200 mb filez. Good enuff to watch on road trippz or for the kidz. 2300, cq 70-74, 128 audio.
tmpgenc should let u feed the svcd file directly. Extract with vcdgear if needed.
ztr