Thanks for the post Pzaur.
Yamaha's description of the RX-V663 is as follows: High-performance Home Theater Receiver features full support for HD audio formats, HDMI video upconversion and deinterlacing, iPod and Bluetooth audio compatibility, improved YPAO, Adaptive DRC (Dynamic Range Control), multi-zone custom installation facility, and four SCENE buttons. That, coupled with a few reviews I found are why believe it does in fact support deinterlacing. If there's something I've not found, please let me know and I'll move forward with my search. But again, thank you for at least addressing the issue I'm trying to get out.
Cavu: Again, your said attempt at an argument is not even addressing the reason I posted this question. Yet, I do feel inclined to respond to your snipping. I know for a fact that the TV is displaying the signal as 480i, because it displays in the upper right of the screen which resolution it is using when you select the input. I've tested this also by toggling the Xbox 360 output to both HD and TV (when toggled to HD = 480P, TV = 480I). As for my model of TV it's a very old Sampo (i don't even know if they still make TV's) and I will state again, it is not working. period. I don't care if it's suppose to, its just freakin not. So as bad as I feel for your broken little ego right now, the only question I'm asking is does the RX-V663 actually deinterlace on the component outputs as it also does the HDMI. Thats my freakin question, shutup about my tv.