Rather than the Time Stretch Tool, you can also Rt-Click on the Clip and choose Time Stretch there. You should also have a red line above that Clip and will want to Render it (you can limit the Render by the WAB, Work Area Bar). Playback should be smoother then.
What percentage are you slowing down the Clip?
I'm talking about the finished DVD motion. Pretty jerky on the finished product. I have it at 42%
How does the Slo-mo footage look in Preview?
Also remember that you are basically doubling the number of Frames.
This might also be of use for improving the results:
Set field options for imported interlaced video
In most video, each frame consists of two fields. One field contains the odd‑numbered lines in the frame, and the other contains the even‑numbered lines. The fields are interlaced, or combined, to create the complete image. Adobe Photoshop Elements includes a reverse field order preset for video imported from a hard disk or Flash memory camcorder that uses upper fields first. If your footage was captured with reverse order fields (upper fields first), make sure your project uses either the Standard or Widescreen preset from the Hard Disk, Flash Memory Camcorders presets folder. (See Create or change project presets.)
Ordinarily, interlacing isn’t apparent to a viewer. But because each field captures the subject at a slightly different moment in time, playing a clip in slow-motion, creating a freeze frame, or exporting a frame as a still image makes the two fields discernible. To avoid this, you can deinterlace the image. Deinterlacing eliminates one field and either duplicates or interpolates the lines of the remaining field.
Reversing the field dominance, the order in which the fields are recorded and displayed, may also cause playback problems. When the field dominance is reversed, motion appears jerky because the fields no longer appear in chronological order. Fields can become reversed when the field dominance of the original videotape is the opposite of the field dominance of either the video‑capture card used to capture the clip or the video‑editing or animation software that last rendered the clip. Reversing can also happen when you set an interlaced clip to play backward.
To avoid these complications, you can deinterlace the image. Deinterlacing eliminates one field and either duplicates or interpolates the lines of the remaining field. You can also set field options for an interlaced clip so that the clip’s picture and motion quality are preserved in situations such as changing the clip speed, exporting a filmstrip, playing a clip backward, or freezing a video frame.
- Select a clip in the Timeline, and choose Clip > Video Options > Field Options.
- Select Reverse Field Dominance to change the order in which the clip’s fields appear. This option is useful when the field dominance of the clip doesn’t match your equipment or when you play a clip backward.
- For Processing Options, select one of the following choices, and click OK.
- Does not process the clip’s fields.
- Interlace Consecutive Frames
- Converts pairs of consecutive progressive‑scan (noninterlaced) frames into interlaced fields. This option is useful for converting 60‑fps progressive‑scan animations into 30‑fps interlaced video because many animation applications don’t create interlaced frames.
- Always Deinterlace
- Converts interlaced fields into whole progressive‑scan frames. Adobe Premiere Elements deinterlaces by discarding one field and interpolating a new field based on the lines of the remaining field. It keeps the field specified in the Field Settings option in the Project Settings. If you specified No Fields, Adobe Premiere Elements keeps the upper field unless you selected Reverse Field Dominance, in which case it keeps the lower field. This option is useful when freezing a frame in the clip.
- Flicker Removal
- Prevents thin horizontal details in an image from flickering by slightly blurring the two fields together. An object as thin as one scan line flickers because it can appear only in every other field.
You can also improve how your slowed down video clip plays by right-clicking on it an applying Frame Blending.
Some video formats respond to Time Stretch better than others, by the way. By nature of the compression method they use, MPEGs do not go to slow motion as well as AVIs, for instance.