[jim cornetet] "Using my own logic, if I recorded soemthing at 1080i at 60i fps, and my final bluray project is going to be 1080 at 29.97 fps.....would it make sense to RENDER in Vegas a progressive scan at 1080p at 29.97fps so vegas takes the 60i frames and BLENDS them down to 29.97fps?"
No you should not. 60i is 60 interlaced FIELDS and each FRAME contains two fields (odd and even) so 60i is actually 29.97fps already.
[jim cornetet] "I'm unsure if redering my bluray proejct with progressive settings will result in best quality playback (?)"
No it will not. The field blending from deinterlacing will make the picture softer. You should deliver 60i footage as 60i on Blu-ray.
[jim cornetet] "It makes sense to me if the master recording was 60interlaced frames per second that my final render would take each odd/even interlaced frame with 60 frames per second to work with and blend them perfectly down to the required 29.97fps bluray playback on a HDTV"
The operative word in that sentence is "perfectly" and you will not get perfect blending because each field was recorded at a different time so any motion between the recorded fields will make blending "imperfect".
~jr
http://www.johnrofrano.com
http://www.vasst.com 
