Ok, I added my system info and also found a "workaround" solution but it's not what I would prefer doing with this software.

I tried turning off the background rendering since this generated the Stair-Stepping artifact in the preview and it could easily be seen when watching the preview screen at full screen. This artifact appeared whether I had "Enable full-resolution preview" on or off. Now I didn't think that this would make much difference when I actually went to the Make Movie tab and rendered out the final movie since I would assume it would rerender a higher quality file even with Background Rendering on. So I tried it both ways, one with Background Rendering on and one with it off. I even tried it with the Background Rendering on but didn't give it a chance to render in the timeline by jumping quickly to the Make Movie tab where I then had it render out a movie file.

The result was, as long as I had Background Rendering on and I added a Video Effect to the video clip, it was going to have the Stair-Stepping artifact on the exported movie no matter what other project or video settings were changed. Also, like I said in the first post, if no Video Effect is added to the clip then no artifact shows up even with Background Rendering on. But rememeber this is only on video clips in the format that is the same as the Project Format thus nothing to trigger the Background Rendering.

The interesting thing about when the Background Rendering is on is that the Stair-Stepping Artifact doesn't show up as long as the video has the initial darker green bar, when it changes to the lighter green and you play that part back while the other parts are still rendering you can see the Stair-Stepping artifact. Of course when the bar turns orange it's there also. At any point during the background rendering, if you try and export the movie using Make Movie it will have the Stair-Stepping artifact in that exported video.

So in conclusion, if you could have a setting for Background Rendering that doesn't add that artifact in the timeline while editing and previewing or when the final movie is exported it would be great since I like the Background Rendering feature but right now I can't use it because of what it does to the final exported video.

Also, since all I shoot is 1280x720 or 720P video and also DV (which I haven't tested yet) I don't have any video to test at 1080 30i or 60i and I don't want to mess with interlaced HD.

Randy