Hi-
Hehe, tell me about it. But that doesn't mean it isn't done all the time. It may be a bigger problem for NTSC people than for PAL people though. I see the damn things way too often (PAL masters used for the NTSC DVD).
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The question is, is there likely to be any picture quality loss in the former case where the material is needlessly passed through a deinterlacing process?
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Of course there will be a quality loss. How much depends on the quality of the deinterlacer. Are you talking about for PAL, NTSC, or both? My experience is with NTSC mostly, and when you have hard telecine (already telecined film encoded as 29.97fps interlaced), a flag reading DVD player can only deinterlace it for output to a progressive display. Just try and watch the mess that a software player such as PowerDVD produces with such material. If you have a better cadence reading player, it can spot the 3:2 cadence and "IVTC" it on-the-fly, so-to-speak. I'm not real sure how PAL DVD players handle it, but since almost all of their movies on DVD are encoded as interlaced, even if the source is progressive, I have a feeling that any player with decent 2:2 pulldown detection will output it to a progressive display without unnecessarily deinterlacing it. But I'll defer to my PAL bretheren on this.