To make film content work in interlaced form, the video from each film frame is split into two video fields —240 lines in one field, and 240 lines in the other— and encoded as separate fields in the MPEG-2 stream.
So basically, does that mean that all progressive film sourced material is encoded as interlaced field pairs to save on space, then flags tell the player to repeat fields to allow for playback on interlaced displays? Presumably when the progressive flag is set (as it should be for film sourced material) the player realises that the fields come from the same frame and ignores the 2-3 sequence, thereby reconstructing the progressive frame?
I guess what I'm really asking is this: is film sourced material stored as interlaced field pairs of 240 lines, or as a whole 480 lines? Everything I read contradicts something else, but you'd expect the DVD FAQ to be right...