Ok. I just used that app. Let's stick with it for the time being. It does seems a little crud to be shareware. But it does the job.
It seems weird but if I use your settings (which btw make sense) I get what I can only describe as a soft wavy interlaced combing. it also seemed noisier?
However. I bypassed the preferences by using expert settings at extract time, and I clicked on export which takes you to the usual QT settings export. I chose DV/DVCPRO NTSC (What I imagine are your timeline settings), high quality, scan mode interlaced, and of course aspect ratio 4:3. I then clicked ok and let it extract. The end result doesn't seem to have the soft combing.
What are your fcp timeline's compressor settings? specifically, is it dv/dvcpro, and is it interlaced? (hint: click on the advanced tab)