Does WM10 deinterlace on the fly?

I decided to not deinterlace some of my videos in Premiere and when I play them in WM10 they look much better than when I deinterlace inside or Premeir or use Feilds Kit to deinterlace.

When I press pause on my WM10 player I don't see any evidence that the footage is interlaced.

Anyone else notice this?
 
I get the same thing. I think its part of ATI's video new video software that I installed with my x800 xl. (SWEET!) Anyhow, it's nice. Makes watching non 24p DVDs a lot more tolerable.
 
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