Hi Mike,
Whenever I have to make any kind of animation with stills I try to do it in AfterEffects. First because you keep working in RGB and also because the posibilities and the results of the animation are much better. Another reason is that you go to work with big stills that you will resize, and for resizeing AE or Shake have better filters than FC and the final result will be better.
If working in FC, as I told you, avoid to use DV/DVCPro codec because you are waisting the 75% of the color information of your stills. That you can see in the moment that you change your sequence setting to a higher quality codec.
About the de-interlacing it shouldn’t be much problem because your stills ar progresive, so you can set them in a progresive or interlaced sequence. The only diffrerence is that if your sequence is interlaced, the animation will look smoother.
So Mike, my advice that that you try first to set your sequence as DVCPro50 or 8b uncompressed. That may be enough to get rid of your interlacing problems.
And don’t forget to set in the Sequence Setting>Video procesing> Motion Filtering Quality: BEST.
Cheers,
rafael