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Thought i add a point to the original posters point. Handbrake does lower the quality of a DVD. You can minimize the loss by using a high enough bit rate, but will never be as good as the DVD source. DVDs are like garbage (since some information is thrown out). MPEG4 is garbage (for the same reason). Garbage goes through more garbage and picks up a bit more. Good thing is that this garbage has a very good use since uncompressed video would take up 20x more storage space.
 
But I don't know that Handbrake uses a particularly sophisticated de-interlacing scheme?

It has de-telecine, which means that when 24 fps non-interlaced material is stored on the DVD in 30 fps fake-interlaced format, it can reconstruct the original 24 fps without any loss. If the DVD player can't do that, then Handbrake might actually give better results.

It also has good de-interlacing algorithms. In theory, it could do de-interlacing better than a DVD player because it has as much time as it wants to do it (it just makes the encoding process slower than real-time), while the DVD player must do it in real-time.
 
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