The good thing is, that you can get the double progressive framerate out of it. Normally, this variant of deinterlacing, called "bobbing" or "blending", depending on the scenes, involves big quality loss, but there exist really smart algorithms now which result in quite good quality (meaning few deinterlacing artefacts).
Although common NLE video editors like FinalCutExpress do offer deinterlacing, and some of them also bobbing, often their built-in algorithm are not particularly good (Vegas 8 interpolate deinterlacer allows quite good bobbing though).
There are several good free open source deinterlacers. The hero of the hour, is yadif. It offers you all important variants of deinterlacing, including bobbing. The results are really good, one of the bests out there, but even better, considering the quality, the speed is excellent (adaptive motion compensation can be a veeery slow task). Yadif is included in players such as VLC and (k)mplayer. For encoding/transcoding matters, you can get it along with virtualdub (windows only. mpeg2/ac3/wmv plugins) and avidemux (mac, linux, windows).
Be careful: the outcome quality depends largely on the codec choice and it's parameters. That's what be the next post about