What is telecine? I suggest you visit this page if you don't understand much of what is written in this document: http://www.divx.com/support/guides/guide.php?gid=10 This URL links to an understandable and reasonably comprehensive description of what telecine is.
A note about the numbers. Many documents, including the guide linked above, refer to the fields per second value of NTSC video as 59.94 and the corresponding frames per second values as 29.97 (for telecined and interlaced) and 23.976 (for progressive). For simplicity, some documents even round these numbers to 60, 30, and 24.
Strictly speaking, all those numbers are approximations. Black and white NTSC video was exactly 60 fields per second, but 60000/1001 was later chosen to accomodate color data while remaining compatible with contemporary black and white televisions. Digital NTSC video (such as on a DVD) is also 60000/1001 fields per second. From this, interlaced and telecined video are derived to be 30000/1001 frames per second; progressive video is 24000/1001 frames per second.
Older versions of the MEncoder documentation and many archived mailing list posts refer to 59.94, 29.97, and 23.976. All MEncoder documentation has been updated to use the fractional values, and you should use them too.
-ofps 23.976 is incorrect. -ofps 24000/1001 should be used instead.
How telecine is used. All video intended to be displayed on an NTSC television set must be 60000/1001 fields per second. Made-for-TV movies and shows are often filmed directly at 60000/1001 fields per second, but the majority of cinema is filmed at 24 or 24000/1001 frames per second. When cinematic movie DVDs are mastered, the video is then converted for television using a process called telecine.
On a DVD, the video is never actually stored as 60000/1001 fields per second. For video that was originally 60000/1001, each pair of fields is combined to form a frame, resulting in 30000/1001 frames per second. Hardware DVD players then read a flag embedded in the video stream to determine whether the odd- or even-numbered lines should form the first field.
Usually, 24000/1001 frames per second content stays as it is when encoded for a DVD, and the DVD player must perform telecining on-the-fly. Sometimes, however, the video is telecined before being stored on the DVD; even though it was originally 24000/1001 frames per second, it becomes 60000/1001 fields per second. When it is stored on the DVD, pairs of fields are combined to form 30000/1001 frames per second.
When looking at individual frames formed from 60000/10001 fields per second video, telecined or otherwise, interlacing is clearly visible wherever there is any motion, because one field (say, the even-numbered lines) represents a moment in time 1/(60000/1001) seconds later than the other. Playing interlaced video on a computer looks ugly both because the monitor is higher resolution and because the video is shown frame-after-frame instead of field-after-field.
This section only applies to NTSC DVDs, and not PAL.
The example MEncoder lines throughout the document are not intended for actual use. They are simply the bare minimum required to encode the pertaining video category. How to make good DVD rips or fine-tune libavcodec for maximal quality is not within the scope of this document.
There are a couple footnotes specific to this guide, linked like this: 
Progressive video was originally filmed at 24000/1001 fps, and stored on the DVD without alteration.
When you play a progressive DVD in MPlayer, MPlayer will print the following line as soon as the movie begins to play:
demux_mpg: 24000/1001 fps progressive NTSC content detected, switching framerate.From this point forward, demux_mpg should never say it finds "30000/1001 fps NTSC content."
When you watch progressive video, you should never see any interlacing. Beware, however, because sometimes there is a tiny bit of telecine mixed in where you wouldn't expect. I've encountered TV show DVDs that have one second of telecine at every scene change, or at seemingly random places. I once watched a DVD that had a progressive first half, and the second half was telecined. If you want to be really thorough, you can scan the entire movie:
mplayer dvd://1 -nosound -vo null -benchmarkUsing -benchmark makes MPlayer play the movie as quickly as it possibly can; still, depending on your hardware, it can take a while. Every time demux_mpg reports a framerate change, the line immediately above will show you the time at which the change occurred.
Sometimes progressive video on DVDs is referred to as "soft-telecine" because it is intended to be telecined by the DVD player.
Telecined video was originally filmed at 24000/1001, but was telecined before it was written to the DVD.
MPlayer does not (ever) report any framerate changes when it plays telecined video.
Watching a telecined video, you will see interlacing artifacts that seem to "blink": they repeatedly appear and disappear. You can look closely at this by
Seek to a part with motion.
Use the . key to step forward one frame at a time.
Look at the pattern of interlaced-looking and progressive-looking frames. If the pattern you see is PPPII,PPPII,PPPII,... then the video is telecined. If you see some other pattern, then the video may have been telecined using some non-standard method; MEncoder cannot losslessly convert non-standard telecine to progressive. If you don't see any pattern at all, then it is most likely interlaced.
Sometimes telecined video on DVDs is referred to as "hard-telecine". Since hard-telecine is already 60000/1001 fields per second, the DVD player plays the video without any manipulation.
Interlaced video was originally filmed at 60000/1001 fields per second, and stored on the DVD as 30000/1001 frames per second. The interlacing effect (often called "combing") is a result of combining pairs of fields into frames. Each field is supposed to be 1/(60000/1001) seconds apart, and when they are displayed simultaneously the difference is apparent.
As with telecined video, MPlayer should not ever report any framerate changes when playing interlaced content.
When you view an interlaced video closely by frame-stepping with the . key, you will see that every single frame is interlaced.
All of a "mixed progressive and telecine" video was originally 24000/1001 frames per second, but some parts of it ended up being telecined.
When MPlayer plays this category, it will (often repeatedly) switch back and forth between "30000/1001 fps NTSC" and "24000/1001 fps progressive NTSC". Watch the bottom of MPlayer's output to see these messages.
You should check the "30000/1001 fps NTSC" sections to make sure they are actually telecine, and not just interlaced.
In "mixed progressive and interlaced" content, progressive and interlaced video have been spliced together.
This category looks just like "mixed progressive and telecine", until you examine the 30000/1001 fps sections and see that they don't have the telecine pattern.
As I mentioned in the beginning, example MEncoder lines below are not meant to actually be used; they only demonstrate the minimum parameters to properly encode each category.
Progressive video requires no special filtering to encode. The only parameter you need to be sure to use is -ofps 24000/1001. Otherwise, MEncoder will try to encode at 30000/1001 fps and will duplicate frames.
mencoder dvd://1 -nosound -ovc lavc -ofps 24000/1001
It is often the case, however, that a video that looks progressive actually has very short parts of telecine mixed in. Unless you are sure, it is safest to treat the video as mixed progressive and telecine. The performance loss is small .
Telecine can be reversed to retrieve the original 24000/1001 content, using a process called inverse-telecine. MPlayer contains several filters to accomplish this; the best filter, pullup, is described in the mixed progressive and telecine section.
For most practical cases it is not possible to retrieve a complete progressive video from interlaced content. The only way to do so without losing half of the vertical resolution is to double the framerate and try to "guess" what ought to make up the corresponding lines for each field (this has drawbacks - see method 3).
Encode the video in interlaced form. Normally, interlacing wreaks havoc with the encoder's ability to compress well, but libavcodec has two parameters specifically for dealing with storing interlaced video a bit better: ildct and ilme. Also, using mbd=2 is strongly recommended  because it will encode macroblocks as non-interlaced in places where there is no motion. Note that -ofps is NOT needed here.
mencoder dvd://1 -nosound -ovc lavc -lavcopts ildct:ilme:mbd=2
Use a deinterlacing filter before encoding. There are several of these filters available to choose from, each with its own advantages and disadvantages. Consult mplayer -pphelp to see what's available (grep for "deint"), and search the MPlayer mailing lists to find many discussions about the various filters. Again, the framerate is not changing, so no -ofps. Also, deinterlacing should be done after cropping  and before scaling.
mencoder dvd://1 -nosound -vf pp=lb -ovc lavc
Unfortunately, this option is buggy with MEncoder; it ought to work well with MEncoder G2, but that isn't here yet. You might experience crahes. Anyway, the purpose of -vf tfields is to create a full frame out of each field, which makes the framerate 60000/1001. The advantage of this approach is that no data is ever lost; however, since each frame comes from only one field, the missing lines have to be interpolated somehow. There are no very good methods of generating the missing data, and so the result will look a bit similar to when using some deinterlacing filters. Generating the missing lines creates other issues, as well, simply because the amount of data doubles. So, higher encoding bitrates are required to maintain quality, and more CPU power is used for both encoding and decoding. tfields has several different options for how to create the missing lines of each frame. If you use this method, then Reference the manual, and chose whichever option looks best for your material. Note that when using tfields you have to specify both -fps and -ofps to be twice the framerate of your original source.
mencoder dvd://1 -nosound -vf tfields=2 -ovc lavc -fps 60000/1001 -ofps 60000/1001
If you plan on downscaling dramatically, you can extract and encode only one of the two fields. Of course, you'll lose half the vertical resolution, but if you plan on downscaling to at most 1/2 of the original, the loss won't matter much. The result will be a progressive 30000/1001 frames per second file. The procedure is to use -vf field, then crop  and scale appropriately. Remember that you'll have to adjust the scale to compensate for the vertical resolution being halved.
mencoder dvd://1 -nosound -vf field=0 -ovc lavc
In order to turn mixed progressive and telecine video into entirely progressive video, the telecined parts have to be inverse-telecined. There are three ways to accomplish this, described below. Note that you should always inverse-telecine before any rescaling; unless you really know what you're doing, inverse-telecine before cropping, too . -ofps 24000/1001 is needed here because the output video will be 24000/1001 frames per second.
-vf pullup is designed to inverse-telecine telecined material while leaving progressive data alone. In order to work properly, pullup must be followed by the softskip filter or else MEncoder will crash. pullup is, however, the cleanest and most accurate method available for encoding both telecine and "mixed progressive and telecine".
mencoder dvd://1 -nosound -vf pullup,softskip -ovc lavc -ofps 24000/1001
An older method is to, rather than inverse-telecine the telecined parts, telecine the non-telecined parts and then inverse-telecine the whole video. Sound confusing? softpulldown is a filter that goes through a video and makes the entire file telecined. If we follow softpulldown with either detc or ivtc, the final result will be entirely progressive. -ofps 24000/1001 is needed.
mencoder dvd://1 -nosound -vf softpulldown,ivtc=1 -ovc lavc -ofps 24000/1001
I haven't used -vf filmdint myself, but here's what D Richard Felker III has to say:
It's OK, but IMO it tries to deinterlace rather than doing inverse telecine too often (much like settop DVD players & progressive TVs) which gives ugly flickering and other artifacts. If you're going to use it, you at least need to spend some time tuning the options and watching the output first to make sure it's not messing up.
There are two options for dealing with this category, each of which is a compromise. You should decide based on the duration/location of each type.
Treat it as progressive. The interlaced parts will look interlaced, and some of the interlaced fields will have to be dropped, resulting in a bit of uneven jumpiness. You can use a postprocessing filter if you want to, but it may slightly degrade the progressive parts.
This option should definitely not be used if you want to eventually display the video on an interlaced device (with a TV card, for example). If you have interlaced frames in a 24000/1001 frames per second video, they will be telecined along with the progressive frames. Half of the interlaced "frames" will be displayed for three fields' duration (3/(60000/1001) seconds), resulting in a flicking "jump back in time" effect that looks quite bad. If you even attempt this, you must use a deinterlacing filter like lb or l5.
It may also be a bad idea for progressive display, too. It will drop pairs of consecutive interlaced fields, resulting in a discontinuity that can be more visible than with the second method, which shows some progressive frames twice. 30000/1001 frames per second interlaced video is already a bit choppy because it really should be shown at 60000/1001 fields per second, so the duplicate frames don't stand out as much.
Either way, it's best to consider your content and how you intend to display it. If your video is 90% progressive and you never intend to show it on a TV, you should favor a progressive approach. If it's only half progressive, you probably want to encode it as if it's all interlaced.
Treat it as interlaced. Some frames of the progressive parts will need to be duplicated, resulting in uneven jumpiness. Again, deinterlacing filters may slightly degrade the progressive parts.
About cropping: Video data on DVDs are stored in a format called YUV 4:2:0. In YUV video, luma ("brightness") and chroma ("color") are stored separately. Because the human eye is somewhat less sensitive to color than it is to brightness, in a YUV 4:2:0 picture there is only one chroma pixel for every four luma pixels. In a progressive picture, each square of four luma pixels (two on each side) has one common chroma pixel. You must crop progressive YUV 4:2:0 to even resolutions, and use even offsets. For example, crop=716:380:2:26 is OK but crop=716:380:3:26 is not.
When you are dealing with interlaced YUV 4:2:0, the situation is a bit more complicated. Instead of every four luma pixels in the frame sharing a chroma pixel, every four luma pixels in each field share a chroma pixel. When fields are interlaced to form a frame, each scanline is one pixel high. Now, instead of all four luma pixels being in a square, there are two pixels side-by-side, and the other two pixels are side-by-side two scanlines down. The two luma pixels in the intermediate scanline are from the other field, and so share a different chroma pixel with two luma pixels two scanlines away. All this confusion makes it necessary to have vertical crop dimensions and offsets be multiples of four. Horizontal can stay even.
For telecined video, I recommend that cropping take place after inverse telecining. Once the video is progressive you only need to crop by even numbers. If you really want to gain the slight speedup that cropping first may offer, you must crop vertically by multiples of four or else the inverse-telecine filter won't have proper data.
For interlaced (not telecined) video, you must always crop vertically by multiples of four unless you use -vf field before cropping.
About encoding parameters and quality: Just because I recommend mbd=2 here doesn't mean it shouldn't be used elsewhere. Along with trell, mbd=2 is one of the two libavcodec options that increases quality the most, and you should always use at least those two unless the drop in encoding speed is prohibitive (e.g. realtime encoding). There are many other options to libavcodec that increase encoding quality (and decrease encoding speed) but that is beyond the scope of this document.
About the performance of pullup: It is safe to use pullup (along with softskip ) on progressive video, and is usually a good idea unless the source has been definitively verified to be entirely progressive. The performace loss is small for most cases. On a bare-minimum encode, pullup causes MEncoder to be 50% slower. Adding sound processing and advanced lavcopts overshadows that difference, bringing the performance decrease of using pullup down to 2%.