So if that is the case, as my last paragraph mentions, then wouldn't you be better off not using "frame based" and deinterlacing on playback with a decoder instead?
Yes, my ATI video card has HighDef Accelleration along with hardware de-interlacing. When my computers display card is connected to the TV then i turn off de-interlacing on the 2nd monitor. The 1st monitor (computer screen), de-interlacing is turned on.
Interlaced video is NTSC/PAL 60/50 pictures per second.
Framebased is NTSC/PAL 30/25 pictures per second.
I don't know the method that VS uses to de-interlace an interlaced video. Some programs only use the top field & discard the 2nd field, others blend or interpolate the 2 fields together. Some programs give you a choice on how to de-interlace the video. I would guess that VS probably blends the fields together.
It can become a complex subject but rule of thumb is to keep your output file the same as the source videos.
You can read all you want on the web but I feel that many people get the term "Video Format" that ones camcorder records in confused with a TV's or HDTV's "Display Modes". It is confusing. I've read on the web where some say "Oh, you have an LCD TV so you have to de-interlace your video because LCD's are frame_based", Not True at all. You connect your cable to this LCD TV correct? That's an interlaced video signal.
You don't need to read much further whether to de-interlace your video or not if you shot it with a standard or highdef camcorder. Just capture some DV.avi with your cam and record some motion (panning, cars passing by etc), this will be fielded as LFF (lower field first) in the cam, capture it and export it to a dvd compliant file using LFF interlaced video. Make sure it's dvd compliant. Then export the same video and change it to Frame_Based when you export it. Now you have 2 files on your harddisk, a fielded video and a frame based video.
Open up a new session of VS and goto "share -> create disk", insert the fielded video & then insert the frame based video. Name each one appropriately in the menu creation (also make sure "Do not convert dvd compliant files" is checked "ON" under the GEAR Icon "Project Settings". Burn a fast dvd, don't use menu transisions, motion menus, fades or background audio to make it fast. In this example you DO NOT want the VS burning module to re-render your videos (or this test will not work).
Then play this test dvd in your dvd player. You will see a hugh difference in better motion with the interlaced video. Also test it playing back as "Progressive" if your dvd player & TV can do progressive. You will have the same results. The Progressive feature on dvd players is a "Display Mode", it cannot make up for the 30 pictures per second you took out of the video when you de-interlaced it. But it can sure use the interlaced video to progressively scan both the fields and make the picture look better.