While helping out friends in past-time for Free, I have a approx 28 min footage HD-CAM recording from one of my friend

General
Complete name : Christine_GradeV_School_Stage_Performance.mts
Overall bit rate : 13.0 Mbps
Maximum Overall bit rate : 18.0 Mbps

Video
Format : AVC
Format/Info : Advanced Video Codec
Format profile : High@L4.0
Format settings, CABAC : Yes
Format settings, ReFrames : 2 frames
Codec ID : 27
Bit rate mode : Variable
Bit rate : 12.2 Mbps
Maximum bit rate : 16.0 Mbps
Width : 1 440 pixels
Height : 1 080 pixels
Display aspect ratio : 16:9
Frame rate : 29.970 fps
Color space : YUV
Chroma subsampling : 4:2:0
Bit depth : 8 bits
Scan type : Interlaced
Scan order : Top Field First

and I wanna....
1) Remove thin bottom green line flickering by cropping
2) Adjust little bit brightness of dark part of video.
3) Convert it to 720x480 SD size for making a memorable DVD.
4) I just wanna remove background noisy dialogues and add some sort of midi-music.
I did it with Audacity coz I made almost final audio track ready.

before i trigger Vegas or Adobe Premier, i am curious to know...
1) Is there any Free Video Editor like VirtualDub, virtualDubmod or AVIDemux can handle this type of input video format?
2) What would be best method for De-Interlacing?
3) If can not, what would be the best work-around?

Thanks in advance!