Is anyone shooting both interlaced and progressive HDV/HD cameras and mixing that footage in the same timeline? Is it better to use progressive or interlaced settings for the timeline in question?

Good question because I'm going to be doing the same thing. I'm shooting 24F with the Canon XH A1, but I have some 60i footage that has to be incorporated into the same film. My rough plan at this point is to use a 24p timeline and convert the old footage first.

For Bill Edmunds, which NLE are you referring to?

In the US you will probably have more problems because of your funny framerates!

But in general you will find it quite jarring to go from interlaced shots with movement, to progressive scan with movement. If there isn't much movement in the shots then there isn't much of a problem. But if there is the immediate effect of suddenly seeing progressive scan is that it looks incredibly jerky until the eye has time to adjust to the new framerate.