Can someone explain in simple layman's terms how 30p and 24p work? I understand progressive vs interlaced. I understand what 60, 30, and 24 mean. Were I get confused is that I understand that this camera actually shots everything in 60i. I edit in Vegas and have read many threads about using other programs to extract the 30 or 24p.

I think I am close to my Ah Ha moment but need a little push.

Anyone care to give a noob some basic instruction in this regard?

A process called telecine is used. Here's a good Wikipedia article on the process:

http://en.wikipedia.org/wiki/Telecine

For encoding 30p in a 60i video stream, 2:2 pulldown is used. The basic idea is to take each progressive frame and split it across two interlace fields. Since the two fields can be recombined into that same progressive frame, there are no interlace artifacts on playback.

For 24p inside a 60i stream, 3:2 pulldown is used. This method will cause minor stuttering of the video, which is why everybody is so excited about the new Canon HF S models' ability to record 24p natively.

So, I guess that in PAL-land, we're lucky in that we are encoding 25p in 50i video stream, and using 2:2 pulldown, making a perfect conversion?

Almost all Canon AVCHD camcorders do all these progressive frame rates in an interlaced stream. For the life of me, I couldn't understand why this was necessary. Most likely reason was to make it easily compatible with old standard-definition composite analogue NTSC (or PAL) output for watching on SD TVs.

In order to edit the content that was shot in either of the two progressive frame rates (on US models), you need to get it de-interlaced and, for 24p, remove the pulldown.

One of the most popular software tools for this is Cineform's NeoScene. It analyzes your original AVCHD 24p file, finds which frames/fields are duplicated, removes the duplicates, re-assembles full progressive frames from the remaining interlaced fields and puts it all neatly into the proper progressive file, encoded in NeoScene (or AIC, or ProRes, if you have a Mac).

So, if you want to edit on a 24p timeline, you'll have to transcode that AVCHD file into something else and remove the pulldown in the process.

EU models that only shoot 25p/50i can use one of plenty free tools that do straight de-interlacing (2:2 pulldown), since their models don't do any telecine.

Funny how we now have HD as a global standard (no more PAL/NTSC/SECAM differences...); yet, the legacy of old analogue divisions among standards continues to rear its ugly head through different frame rates. Looks like it will take another 10-20 years for SD TV to completely die before we can settle on a common global frame rate and forget about these different frame rates.