I am having serious issues with using 25p mode on my new XF300. When I shoot in 25p when I pan or move the camera much then the image gets blurred and has a sort of lag. It looks like the effect of a low shutter speed but even if I rack it up to 1/100 + it's still the same. The default of 1/25 is not good at all.
When shooting at 50i the clips are fine.

Is there something I am doing wrong, is the camera faulty or is that just how it is?

Andy,

It's probably your monitor because 25P @ 1/50th should look great whether the camera is in motion or not. Are you watching the original footage played back (or live) from the camera on a genuine HD television monitor, or are you making critical judgments from a computer monitor? How does it look on the camera's LCD? You have not said WHERE you are seeing this problem, and that is very important.

I'll bet if you do some troubleshooting you'll find you don't actually have a problem at all with the camera or your footage, you just have the wrong monitor for the job.

Mastering the Canon XF305/300 Camcorders training DVD (http://www.vortexmedia.com/DVD_XF305.html)

I am actually judging it when it's played back on the LCD screen of the camera. I've not burnt the footage or really checked it properly on a computer monitor.

When you say WHERE am I seeing this problem do you mean where in the image?

When I say WHERE I mean what kind of monitor and at what stage of the workflow.

I wouldn't suggest judging too much by what you see on the LCD or a computer monitor. Although, with that said, I haven't noticed any blurriness on the LCD monitor with 24P or 30P.

I suggest you connect the camera to a proper HD monitor and see what you are are really getting.

Compared to 50i, 25P will tend to blur more during pans as the shutter is open for twice as long, 1/25th as opposed to 1/50th. Try using a 1/50th or 180 degree shutter speed when shooting at 25P to bring the shutter duration down and sharpen up the image during motion.