We use linear interpolation, but by replacing vtkGridTransform by vtkBSplineTransform you can get bspline interpolation. However, then you would introduce distortion and you could no longer do accurate measurements in slices. It may be added as an option to the reformat module if somebody finds an application where smoother displacement field is more important then quantitative measurements.
We tried thin-plate spline transforms with control points added at certain distances from the centerline, but it did not work well. Distortion was very unpredictable and hard to control, and computation was much slower.