I always turn on deinterlacing for video capturing.
Maybe the deinterlacer is not very good...
Sad to say, only the very expensive video cameras support progressive shooting. Even anakin0608's HDV 1080i camcorder does not support progressive.
I have used this Panasonic AG-DVX102BEN professional video camera ONCE at the recent Motor Show 2006. But I didn't enable progressive shooting. It was the very first time I had used a pro video cam and I was not familiar with the camera settings at all. Many of the menu settings seem alien to me. But I made use of the iris control and gain settings and auto white balance. Its a Standard Definition professional camcorder.
Even the S$5700 Sony HDR-FX7 and the S$6150 Canon XH A1 prosumer HDV camcorders do not support native progressive recording. Hobbes00's S$14000 Canon XL H1 HDV pro supports 24p 30p. But that is too costly.