How do you convert interlaced footage to progressive footage inside of final cut pro. This is in order to use Instant HD for final cut pro. Any help would be greatly appreciate. Thanks all.

Since progressive is captured differently than interlaced it's not really possible to change interlaced into progressive.

But check out Joe's Filters, Nattress and DVfilm Maker. They all can create pseudo progressive footage using adaptive deinterlacing. They all feature free trial versions so you can see which suits you best:

http://www.joesfilters.com/joes_deinterlacer
http://www.nattress.com/Products/filmeffects/G_Smart_DeInterlace.htm
http://dvfilm.com/maker/macversion.htm

I was going to try the natress stuff, thank you. I was just wondering because red giant says your footage must be converted to progressive in the host application (in my case final cut pro) in order to apply the instand HD plugin.

I'm not familiar with Instant HD, so I just looked at their site. You could deinterlace your footage with the built-in FCP plugin, but that doesn't seem like a very good approach. It will discard one field of your interlaced video and cut your vertical resolution in half. That's probably a bad idea when you're going to be enlarging standard definition to high definition.

See the following link: http://www.redgiantsoftware.com/instantfaq.html

Prior to up converting with IHD you need to deinterlace the material to a progressive format. Ideally, we recommend using a high quality deinterlacing tool like Magic Bullet Suite or Fields Kit

I think the software I mentioned above will also give you high quality deinterlacing.