OK, I have partially solved this issue. I had forgotten that I had sped the duration of the ending up by 50% so as to fit correctly. When I use the original comp (sped up in the master comp) it renders correctly but when using the original length interlaced pre-rendered file (which is then sped up by 50% in the master comp) I get the error I described in the OP.
What this seems to mean is After Effects is only using a single field of each frame of an interlaced movie if you speed it up using AE's time stretch. Thus effectively halving the resolution of the frame and producing the jaggy effect visible on the curves of the text.
Is that how AE has always done this and is there a way around it with frame blending or such? Although I have rendered out a clip that was sped up before rendering that now works correctly when I re-import it I am concerned about using time stretch on other interlaced footage in the future.
What are your interpret footage settings? Do you have preserve edges on? Does it help? Is there a reason you're doing interlaced? You might try double the frame rate and progressive for your intermediate render.
Hey Szalam, thanks for the reply.
I use interlacing because most of what I create is for broadcast and I am required to render it at 1920 x 1080 50i. Progressive produces too much stutter on pans, moving text etc and using enough motion blur to create smooth motion obscures too much of the artwork/web pages I am trying to show. I interpreted the footage as upper field first which is correct for my renders and I did try preserve edges but it didn't help.
I did render out an intermediate clip that was already sped up to the correct duration that was interlaced which works correctly so the immediate problem has been resolved but I am often provided with live action interlaced camera footage that I have to speed up and slow down and was concerned that this issue may cause image degradation problems.