Deinterlacing SD Video using Intensity Pro

I just purchased an Intensity Shuttle and I'm digitizing VHS footage. I'd like to eliminate the interlacing, but I'm wondering if I'll loose half the resolution in the process. Also, I haven't been able to get the upscaling to work using the Desktop Video app. I'm going to be xferring higher quality video soon, so it will make more of a difference in the future.

Thanks,
Michael