Is there a way to deinterlace footage using Blender? I have a camera that has always seemed to give me bad video because of interlacing, and until I watched this video, I always thought that it was just a limitation of the camera. 

From that video, I learned that video can be deinterlaced, is it possible to this using Blender?
In the video sequence editor you have an option in the properties panel --> filter tab, you can check de-interlace.