They took that out in 2.0. It is very frustrating!! Please submit a feature request to bring it back. The only way to do it is to use desktop editing in the editing options. That is pretty much useless because you can NOT even view on an external monitor in that editing mode.
I have not tried that exact workaround but let me know what you come up with. Some people say you can edit in a interlaced timeline but I find that not to be true. The transitions are interlaced within your progressive video. It just does not look right when you output it. It is very frustrating.