is Frame Mode in XL1s equivalent to Deinterlacing an interlaced video in NLE ?

Not quite.

Take a look at the following for a better understanding of "Frame Mode".
http://adamwilt.com/DV-FAQ-etc.html#filmlook

- don

ok, so I get it. but they make the "Frame mode" sound so great. so why not use it all the time? are there any disadvantages for it? or is it just a matter of taste?

This article (ftp://ftp.panasonic.com/pub/Panasonic/Drivers/PBTS/papers/Progressive-WP.pdf) by Steve Mullen gets into the technical specifics. According to the article, you lose a significant amount of vertical resolution when shooting in frame mode.

You lose resolution, but not as much as using de-interlacing.

De-interlacing would result in a resolution loss of about 50%, whereas Frame Mode gives you a resolution loss of about 25%.

The look is the same as de-interlacing (except with the better resolution).

Why not use it all the time, you ask? If you like the look, go ahead -- that's what it's there for! The drawbacks are if you intend to transfer your footage to PAL (assuming you're NTSC already) or for making a feature to be transferred to film, or using something like Magic Bullet to create a 24P simulation -- in those circumstances Frame Mode is the wrong choice and will severely limit your flexibility. For NTSC television release, Frame Mode is perfectly acceptable, provided that it gives you the look you want.

Adam Wilt's explanation is a bit different from ones I've seen before, but makes the most sense as to why the effect isn't duplicable in post with a software algorithm.

In essence, an even field from R & B CCDs is blended with an odd field from the G CCD, giving you a frame that has the scanlines for both fields captured at the same instant in time. This gives a definite improvement over mere field-doubled "frames", but it's not as sharp vertically as true proscan. Each "scanline" is actually composed of two scanlines from each chip, so there is some softening vertically; also, the effective chroma resolution is halved vertically.

Thus, the effect can only be pulled off on a 3-chipper, and only in hardware.

Deinterlacing isn't all that bad...Right if one uses field doubling or field interplation there is a 50% vertical resolution loss. Modern motion adaptive deinterlacers are virtually lossless w.r.t. vertical resolution. All nowadays flatpannels, and non CRT projectors have (need) intelligent deinterlacers build in, an perform very well.