[Ralph Parker] "does the m2V encoding do some sleight of hand to make progressive frames into interlaced?"
Yes, specifically this (from Wikipedia):
By using a pattern of REPEAT_FIRST_FIELD flags on the headers of encoded pictures, pictures can be displayed for either two or three fields and almost any picture display rate (minimum ⅔ of the frame rate) can be achieved. This is most often used to display 23.976 (approximately film rate) video on NTSC.
[Ralph Parker] "If I were to convert the project sequences to progressive, (for learning's sake), by using the mentioned settings, would that give my video a softer "film look" as opposed to the harsh, stark video look?"
That I don't know - you might have to experiment. I would do any of that type of experimentation in Compressor rather than FCP. If you set a sequence to progressive in FCP, I believe it will just throw away a field. Compressor offers the options (especially within the Frame Controls tab - Retiming) to smooth the motion between frames when retiming footage. It's worth trying small sections to see if it's a look you like. Also of note for this type of conversion is the great and useful JES Deinterlacer app. Check that out - the instructions are pretty detailed and informative. After those, there are various filter packages you can buy for FCP that do retiming with varying degrees of sophistication.
