PS2 – Use the bob deinterlacer on any timing critical games for less input lag. For interlace the trade off is picture quality or low input lag, you can’t have both.
Dreamcast should definitely not be giving you the screen flicker. Are you running that through a switch or anything similar?
On the MD2, are you running PAL or NTSC software?
Settings remain in memory after the unit is unplugged if you choose “save settings”.
Sadly no, I’ve encountered several Panasonic sets that won’t let you change aspect ratio when in game mode. Very annoying.