I've heard that Premiere has a problem editing video shot in the "frame mode". Does anyone know about this?

I hear a lot of people saying they prefer the XL-1 over other cameras primarily because of "frame mode" and the film look. If not for the "frame mode", would they prefer another camera (the Sony PD-150, for instance?)

It's all very confusing... :0

Premiere has no problem whatsoever with frame mode. As long
as you do NOT tell it to de-interlace (since there is no interlacing).
I've worked with frame movie material in Premiere without any
troubles!

I'll even go a step further. Premiere has no knowledge whether
the footage is interlaced or progressive, since the AVI format
does not contain such information. You have to tell Premiere
explicitly to do certain things (or don't). This is an advantage:
you know for sure it will work with interlaced and non-interlaced
footage!

Thanks for the info!

Do you know if you can mix video shot "frame mode" with interlaced video? Would the interlaced video have to be "de-interlaced" first? Does this affect the quality of the clip?

Yes you can mix the two video types. Nothing needs to be deinterlaced. I mean you can watch Terminator 2 (24fps) and Home Improvement (60i) on the same VCR without any problems, right? You could also import both into Premiere and edit them together. Same goes for just about everything else. The software has absolutely no idea if something is in Frame mode, interlaced, or whatever. It just sees 60 fields per second and it is happy. You will notice a visual difference between the frame mode and other interlaced footage, though. The other footage will look much more "camcordery" or "news footage" like.