<<<the FCP built in conversion looks just fine.>>>
There is no "built-in conversion" that I know of. What FCP will do is duplicate or drop a whole frame every so often to make up the difference. It doesn't make new frames which is what the real conversions do.
All these problems show up as motion artifacts or hitches in the action which appear best on a DVD and a glass monitor. This is where LCD screens kill you. A lot of them can't respond fast enough to show you the flicker or image stutter.
If it looks good for you through all your tests, it probably is.
As far as multiple conversions go, you're on your own there. With a half and half timeline, I don't think there are any good options. You're always going to be converting something twice, I'm guessin'.
NTSC is low rez with really good motion. PAL is hi rez with stuttery motion. In plain conversion, they usually add up the wrong way. Stuttery-fuzzy.
Also, all the converters work on the premise that you had known good working video to begin with. If you double convert, you will be converting the previous conversion's artifacts. This is the DV to DVD problem. DV is already conpressed, so the trip to DVD is double conversion.
I wonder what would happen if you saved your show or project and dumped it onto a PAL timeline and rendered.
Koz