Sounds like you didn't prepare your source properly.
The KDVD template presumes that the source is 23.97 frames per second. I'll bet yours was at 29.97 fps
In DVD2AVI, under VIDEO/Feild Operation, make sure that "Forced Film" is checked and save your project again.
This will prepare your source @ 23.97 fps. I have done this even when the stats window told me that the video type was NTSC as opposed to pure film or even hybrid.
Only once out of 200 or DVDs that I've archived has this been an issue.
The first time I used Kwags template, I made the same mistake & got the vertical lines too ....
Hope this helps ...
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