Just go to project properties, and select either "blend fields" or "interpolate" as your deinterlace method. I thought there was a tab but there isn't. Just a three way selection.

The rule of thumb is:

Interlaced video: either "blend fields" or "interpolate fields".
Progressive video: "None"
Mix of progressive and interlaced footage: "blend fields" or "interpolate fields".

The results of this will be as follows:

Interlaced HD to interlaced SD with deinterlace method chosen: even and odd fields will be separated, resized and folded back together into an interlaced image. Type of deinterlacing selected doesn't matter.

Interlaced HD to progressive SD with deinterlace method chosen: video will be resized after deinterlace. Interpolate fields will give you a sharper image but blend fields will give you smoother motion.

Progressive HD to progressive SD without deinterlace method chosen: video will be resized without frame separation. A much better choice for resizing progressive footage.

Mix of HD interlaced and progressive footage resized with deinterlace method chosen: Progressive footage will be separated into even and odd fields before resize along with interlaced footage. This won't look as good as resizing the progressive clips without the field separation and will lose some sharpness, but it will still look very good. This is much better than what will happen to the interlaced footage without a deinterlace method chosen: it will be resized without field separation which means that the interlaced comb of the motion parts of the frame will be resized. This gives you really jiggly looking vertical edges anywhere where there is lateral motion and looks terrible.