Interlaced os more of a analog TV technology that was applied to high-res TVs IIRC.
Basically you get half of the frame seperately, which alternates with the other half during every cylce, instead of progressive, where you are presented with the full image constantly.
1080i for example shows two 540 line images for each cycle.
Basically, Progressive requires more to drive it such as higher resolution displays, but it results in more photo-realistic freeze-frames and somewhat greater quality if you have the equipment to bring it out.