Thanks for the reply, Mark. I'm not doing anything you mentioned. I get the flash frames with no editing whatsoever. I drop a video clip (length of clip doesn't matter) from my SR11 into Pinnacle and simply choose to recode to mpeg2, mpeg4, WMV ... it doesn't matter. The flash frame problem shows up on unedited clips straight from the cam regardless of what format I render to.
This sounds like a rendering bug to me.