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Given the option between D1 and D2, D1 is obviously what they would use given the heavy amount of live-action bluescreen photography shot on the Paramount stages and the front light/back light ultraviolet matting they were doing on the motion control stages at Image "G".
As I said, D2 might have been used further down the chain when titles were put on the episodes. That would explain everything you're pointing out without contradicting the existing sources of information we have.
You might want to take a look at "Timescape". On the DVD at the 38 minute mark there is a shot of the Enterprise and Romulan ship where the camera pans over the back of the Enterprise. It is a shot that, as far as I can recall, is unique to "Timescape", and it is used a number of times throughout the episode. There is rain bowing on the tiny windows, not as bad as in the first season episodes, but it's there. Plus there is another shot that is used quite a bit in the episode, a shot that pans from the Enterprise to the runabout. You can clearly see the D's deflector dish in this shot, and while it does not fluctuate like normal, there is rain bowing on the rest of the tiny windows in the D, plus the runabout shows quite a bit of jiggling on the various levels that are seen. Even Worf's sash and the collar piece's of the Romulan uniforms, especially the one's on the transporter pad.
And while I agree that the series was moved to Image G for better editing, the shows do not display the quality that D1 would offer. I'm currently on "Duet" from DS9 at 19:02, and I just noticed the close up of Sisko's monitor: there is some tiny writing on it along with the big numbers "302". That sticker would've been on the original prop, not an insert shot (aside from Dukat on screen); all that writing, including the 302 is showing a lot of rainbowing from a composite source. Therefore I believe that someone mis-spoke and it was not D1 the quoted person meant but D2. Remember, Sony developed D1 and then co-developed D2 with Ampex. So there are Sony D2 machines out there.