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If you want colour at the VGA port first you need a colour space converter. First off, you have to convert the 422 YCbCr data to a 444 data rate (its quite straight forward 0 just hold the Cb and Cr values for 2 clocks). Then you need a 1x3 x 3x4 matrix multiply to convert the colour space to RGB. If you just want black and white, you need to extract Y from the input.
Then, like you fear, you will need to make the video progressive, and possibly upscale/downscale it depending on the output video resolution, as SD video has 768 pixels per line. You will need a field buffer to do this, but a the deinterlacer megafunction may do it (I dont know because I have never used it).
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Dear Tricky!
I want just clear video at the output, it may be black and white.
According to your statement, I come to know that I can get black and white image at the output from YCbCr, by replacing Cb and Cr with zeros.
And as YCbCr is interlaced (60Hz and 30fps) so it may directly connect to vga (without any buffer in between) to get black and white video.