I'm having a very similar problem right now. The error is the video will be split by a horizontal line and the top part is slightly offset by the bottom part. Usually the picture is very clear (720P) but during an action sequence the lines appear and seem to scroll from top to bottom or wherever the specific action on the screen is taking place. It does this on DVD movies, or any type of video files I play. I have it connected to a plug and play LG plasma where the error is evident, the laptop display does not show the same problem. The video card automatically adjusts to the TV's resolution setting.
I have tried updating video drivers, flashing BIOS, even resetting to the factory settings but nothing has corrected the problem. It hasn't always done this so I know it is capable of sending a clean signal, I'm just not sure how I can get back to that state. Any suggestions?