[symonjfox]

It depends on your target! If you want to create a DVD, you surely can keep the source interlaced and encode it (if needed it) as it is. If you want to encode it to MPEG4 video (Divx or Xvid) you can choose if deinterlace or keeping it interlaced.
IMHO interlaced is better because the original structure of the video is preserved, while if you use a bad deinterlacer, the final encode won't be so nice.