This article is from the MPEG FAQ, by Frank Gadegast phade@cs.tu-berlin.de with numerous contributions by others.
Two methods can be applied to interlaced video that maintain
syntactic compatibility with MPEG-1 (which was originally designed for
progressive frames only). In the field concatenation method, the
encoder model can carefully construct predictions and prediction errors
that realize good compression but maintain field integrity (distinction
between adjacent fields of opposite parity). Some pre-processing
techniques can also be applied to the interlaced source video that
would, e.g., lessen sharp vertical frequencies.
This technique is not terribly efficient of course. On the other hand,
if the original source was progressive (e.g. film), then it is more
trivial to convert the interlaced source to a progressive format before
encoding. (MPEG-2 would then only offer slightly superior performance
through such MPEG-2 enhancements as greater DC coefficient precision,
non-linear mquant, intra VLC, etc.) Reconstructed frames are usually
re- interlaced in the Display process following the decoding stages.
The second syntactically compatible method codes fields as separate
pictures. Rumors have spread that this approach does not quiet work
nearly as well as the pretend its really a frame method.
 
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