Capturing a timeline snapshot from the preview window is entirely wysiwyg, so make it look good there and grab the still. It won't look any different in Photoshop.
Method:
Go to the preview window, set preview quality to good, right click- display at project size, size the preview to the project size, find the frame you want and grab it. Stills grabbed from the timeline are pixel aspect corrected, so there's no worries there.
If you see unacceptable interlacing, set the project to progressive temporarily (or you might event set preview quality to "preview"- that also displays a deinterlaced image, but the quality is a little lower).