I'm capturing 720P MJPEG at 59.94 fps using VirtualDub. Playback within VirtualDub is fine.
However, I am running into encoding issues. It seems that Handbrake has trouble with BlackMagic's MJPEG format. The output is suffering from what looks like interlacing artifacts.
I suspect this is due to a decoder issue. I say this because MPC-Home Cinema used to be able to play my raw captures just fine, but the latest version suffers from the same interlacing artifacts I get from my Handbrake exports. Forcing MPC-HC to use the BlackMagic decoder fixes the playback issue. Handbrake and MPC-HC are probably using the same open-source MJPEG decoder.
I am wondering if any of the people here have encountered this issue as well, and know any workarounds. I can't afford a commercial encoder like Vegas or Premiere just to convert my captures to high-quality H.264.