You are refering to VHS head switching noise. It will not be seen on a normal TV display. click the More button in the Monitor window and
select 'Safe Margins'. Anything outside the outer frame will not be seen on a normal TV display.
However using an LCD TV or if played back on a computer, you will see that area. You could use the "Crop" video effect to trim the scan lines off the bottom. If you scale up the video it adds a lot processing and lowers the video quality.