PC-based DVD player software doesn't do motion adaptive de-interlacing, but a good consumer DVD player will.

A good PC video card seems to do it, and it's part of the card I use.

"ATI’s VIDEO IMMERSION™ II technology integrates industry-leading digital video features, including advanced adaptive de-interlacing algorithm, temporal filtering, and video gamma enhancement for unprecedented video quality and integrated digital TV decode capability."

Some people wonder why I like ATI so much. Checking NVidia on this one, it seems they don't have adaptive yet, just advanced. NVidia hasn't advanced technology like this since the release of the GeForce 2 from what I can see from their site.