VIP Scaler II Megacore: Garbage at bottom of image

I have not used the clocked video input or output cores so I'm not sure how they work. The easiest way to figure this out may be to simulate the whole pipeline so you can see exactly what's happening. Either that or use SignalTap.

On a different topic, are you aware that the aspect ratio of your input and output video are not the same? 1024/768 = 4/3 whereas 1280/1024 = 5/4. This means your images are being distorted slightly (compressed horizontally I think). That may not matter in your application, but if it does then you need to change your output resolution to something like 1280x960.