If you’re going to DVD or Bluray, I would leave it interlaced.
Digital file for youtube/vimeo/screen playback, you’ll want to de-interlace the video.
Alternatively instead of a Data Disc, why not post the video somewhere and send link?
If festival folks are wading through a stack of DVD submissions, they’re probably kickin back on sofas or office chairs and watching a big TV fed by a DVD/bluray player and not crowding around a laptop, JMO.
Chris Tompkins
Video Atlanta LLC