What is the best format to encode a DV video once it has been cut for editing... I have encoded using MPEG2 and im getting these scan lines (these lines only appear at places where there is movement on screen) Can anyone tell me why this is happening?

this is what i mean:
http://img142.imageshack.us/img142/6307/image25jl.jpg

those are interlace lines, caused when you view an interlaced source on a progressively scanning screen. To get rid of them, you could apply a de-interlace filter, but that cuts your vertical resolution in half.

Most editing programs have a setting to display video de-interlaced without applying a filter. I would recommend keeping the video footage unaltered as long as possible, in case you want to output it to a source that is interlaced.

I guess I should then check for the MPEG2 Codec settings? I have noticed these lines don't appear when I output in WMV.