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Use a 720p/25 sequence and downscale the 1080 stuff.
In Premiere Preferences, there is a checkbox for "Default Scale to Frame Size". If you enable that, when you Import clips they will automatically fit the current editing size. Does not affect clips imported prior to checking the box. On timeline, right-click clip and choose "Scale to Frame Size" to change individual clips.
As Jim recommended, if your intended delivery format is 720p, don't upscale to 1080 and then back to 720p, will cause unnecessary quality loss from scaling. Edit it all as 720p.
Safe Harbor Computers
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The timeline should match the final output so use a 720p25 timeline.
If you have a 720p as your output you have a 1280x720 canvas. If you drop a 1920x1080 video on it will be too big. Do as SAFEHARBOR11 said....
In Premiere Preferences, there is a checkbox for "Default Scale to Frame Size". If you enable that, when you Import clips they will automatically fit the current editing size.
...OR for each clip open up the effects->motion and change the scale of the 1080p footage (1280/1920=66.6666%) - it won't divide nicely so you'll have to do 66 instead of 67% so that you don't get black edges.
As for output frame rate... do you have to do 25fps? If it's not for broadcast - it is my understanding that most PAL countries have BD players that can understand 24fps as well. I say this because maybe you'd be better off retiming the 50i footage to 48i (a 4% slowdown) and thus 24fps. You do this by right clicking and Interpret Footage-> 24fps instead of its 25fps.
You can then edit between the two cameras without throwing frames on the floor since the 720p30 will 3:2 pulldown to 24fps too.
BUT, you only need to do that if the shudder from dropping 1 in 25 frames on the floor has a worse look than slowing down the original footage. It is easier if you're editing back and forth with the two cameras to drop those frames but perhaps slowing down would be better for you.
Some professionals cringe at the idea of throwing frames on the floor, others that the original is slowed down. It's up to you.
As some food for thought....
When I was on the DVD authoring team for the "Dune" release in Australia ('98) the telecine of the original film was sped up from 24 to 25fps. We then sped up and pitch shifted back down the 5.1 audio track to match.
Another example [I didn't work on] is "The Thomas Crown Affair" release in the USA. The title menus must have been done in the UK (or Oz) and not pitch shifted because it has a 4% higher pitched music vs the film. - it's very noticeable because from the root menu it goes straight to the same piano tune in the film and drops a couple tones. (^dink dink dink^.... ^dunk dunk dunk^) In the film itself you have no idea that the feature was [or was not] stretched 4% to fit to 25fps or 30fps (ie 24fps original 3:2 pullup).
Rallyemax, Jeff, Jim.