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Frame dropping is common to every PAL->NTSC converting player I've ever used. I'm not sure why is happens because there are actually less fields/frames per second in PAL than NTSC, so if anything frames should get repeated. Perhaps someone more techie than me can explain what's going on.
I have two excellent players to recommend: The Toshiba 4980 (aka the Toshiba SD-K850 at Costco), and the Pioneer DV-588A-S. Both have killer PAL->NTSC conversion, and both support DivX (mp4) files. The Toshiba has a simple one-time remote hack to make it region free. The Pioneer must be flashed with hacked firmwares found around the net. The Toshiba upconverts to hi-def (720p or 1080i) over HDMI. The Pioneer supports SACD and DVD-A. Choose which model fits your needs best. Both cost close to $100.
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