I have heard that flipping in post degrades the image. Has anyone done any test to prove or disprove this theory?

I don't see how it would. All it is doing is moving pixels around. On most NLEs the preview of the effect before rendering will be lower quality in order to save computer resources, but after rendering there should be no difference in quality.

David, that would very much depend on the workflow you employ. If you do a vertical and horizontal flip in an NLE timeline, it wont degrade. I have, however, noticed a loss in using certain format converters,(procoder)in this workflow;
firewire capture of m2t.-> loading m2t file into procoder and add rotate filter, -> convert to canopus HQ for editing.

That produced bad results.

Using Cineform's built in 180 rotate feature or using mirror or rotate filters within reliable NLE's (premier, edius, avid, FCP ..) wont degrade your footage.

Ted

If the image size (pixel count) remains the same, and just maths has been done, then the quality doesn't degrade. It's only when the discrete values are calculated as in making a new value from a combination of discrete values, such as is done with effects and image manipulation that quality suffers. Some effects such as stabilisation are pretty good at really reducing res - as they generally need to do a crop on the picture, and 'spread' it a little - meaning there are not enough pixels to fill the screen, so the ones that are there are re-mapped and scaled - 'creating' new ones and altering current ones. S simple flip horizontal or vertical is fine - rotations are not.

A 180 degree rotation under the Motion tab in FCP neither degrades the image nor requires a render.