Several things I notice...
1-if I don't capture JUST the right frame the image looks much worse than it does on DV. In fact it seems like any time I pan the image gets soft. Is this a by-product of the HDV compression?

Several of these frames you'll see what the blur looks like frozen in a screen grab. I think all but one has it.

2- Is HDV supposed to be UPPER FIELD first? I know DV is lower field- I just want to make sure it's my capture preset that isn't causing the above issue.

3- Anytime I "capture now" in FCP with HDV footage and hit the end of the recorded material on tape....I get an "Unspecified Capture Error" Message after I exit out of Capture now hitting ESC'.

Here's the images...

http://www.glenelliott.com/HDV/HC-7_01.jpg

http://www.glenelliott.com/HDV/HC-7_02.jpg

http://www.glenelliott.com/HDV/HC-7_03.jpg

http://www.glenelliott.com/HDV/HC-7_04.jpg

That's interlacing. HDV is upper field first yes.