There is a free yadif (superior interpolation-based deinterlacer) plugin for Sony Vegas 10: http://www.yohng.com/software/yadifvegas.html and http://forums.creativecow.net/thread/24/923607. As I understand it, yadif is an advanced deinterlacer like in Handbrake, superior to Interpolate and Blend. There’s a beautiful graphical description of how it works at https://trac.handbrake.fr/wiki/yadif.