Yes way better. The Panasonic S35 has a low quality cheap de-interlacer and I saw flashing artifacts on some menu screens. The Denon DVD-910 has the top-rated Faroudja de-interlacer so it is 10x better.
I'd try interlaced on your S35 as well, at least for the time being, let your TV handle it. Sometimes this can result in suprisingly good PQ.
From your wording you may be inputting progressive into your TV from the S35, then the TV will not deinterlace...
I'd switch to progressive if you go with the 910 (which I would try, definately in a different league than the S35. also note this shows up as a refurb for about $100 from time to time)