If your display supports 1080p, you should not send it a 1080i signal.
You say that your display supports 1080p at "any hz" which isn't very helpful as many displays only support some refresh rates.
Ideally your display will support 1080p at 23/24Hz, 50Hz, and 59/60Hz. Some older displays won't support 23/24Hz, and some US (NTSC) sets won't have 50Hz support.
With the madVR switcher, you set these with comma-separated values - you only need one from 23/24, and 59/60, not both. (I prefer 24 & 60 if they are supported)
Set up this way, madVR will switch to the most appropriate refresh rate for the content being displayed - 24Hz for 24fps content, 50Hz for 50fps content, and 60Hz for 30/60fps content.
The key difference between madVR's switcher and Media Center's switcher, is that with IVTC content (PAL film content, or 3:2 NTSC content - which it sounds like your problematic 29fps file is) madVR will switch to 24Hz rather than 50/60Hz.
Note: the "treat 25p movies as 24p (requires Reclock)" option also works with Media Center's own "
Video Clock" feature.
If your display supports 23/24Hz and 50Hz natively you
should not use Smooth Motion - it is for displays which
don't support 23/24Hz or 50Hz.
I don't know if your system will be fast enough to handle madVR properly though.
This topic should help you tune madVR's performance to hopefully achieve smooth playback.