This nice tiny DVD camera of mine captures footage which turns to be interlaced... While it is nice while watching on a TV, it turns to be at least annoying to watch on a computer. There are some so called comb (or mouse teeth) artifacts which annoy a lot. Of course many video players can deinterlace video on-the-fly however it turns that they do that with very different results especially concerning overall video quality.
So I poked around and it seems that one of the nicest deintralcers available is compiled into MPlayer. It is called yadif. So it's really easy to use. I fidlled with some settings for a while and ended up with a command as follows:
mencoder source.mpg -of mpeg -mpegopts tsaf:format=mpeg2:muxrate=30000 -noskip -vf yadif -o dest.mpg -oac copy -ovc lavc -lavcopts vcodec=mpeg2video:mbd=1:aspect=16/9:vbitrate=9100
It turns a file called source.mpg into a nice deinterlaced dest.mpg.