converting to DVD: Interlace or non-interlace

[freebutterflyx]

I have a downloaded AVI file (DIVX or Xvid, don't know for sure for the moment) 25 fps and I want to convert it to mpeg DVD 16/9 Pal format with TMPGEnc for playing on a standalone DVD player.
I have done this before without any problems but I think I messed up some of the settings in TMPGenc, mainly the interlace or non-interlace setting.

Now I have these settings, are these correct for my purpose?
Video stream setting - encode mode: interlace
Video source setting - video source type: non-interlace

(Or should I use something different)

[guns1inger]

I believe that with PAL you don't have a choice, PAL DVD is interlaced. If you have a progressive scan TV and a player capable of progressive scan output then it will put it back together for you afterwards.