Mike,
When exporting for the web, I usu. do the following steps:
1)Make a new Sequence with the same DV-NTSC settings as the original and title it "Web Sequence" or some such.
2)Apply the "De-Interlace" filter (under "Video") to the entire sequence and render it.
I also usu. export the movie as a Final Cut Pro Movie (not self-contained), then compress it in either QT Pro or Cleaner 5. This way you can make a small short clip and try a bunch of codecs and sizes to see what works best.
But the "De-Interlace" filter should get rid of your interlacing artifacts.
MM