Interlace has to do with the manner in which the GIF saves its data.
Without interlacing, pixel information is saved from left to right, top to bottom, which causes browsers to load the pictures from top to bottom; while the picture is loading, you can see the rows of pixels being drawn one by one from the top until the whole picture is filled in. Non-interlaced GIFs are preferred.
Interlaced GIFs save their data out-of-order. The result is that you can see the entire picture all at once, even before it has finished loading; there is no blank space at the bottom of the picture. As the GIF is loading, it draws itself with increasing detail. At first, the GIF is all gigantic blocks; very little detail is visible. As the image loads, the granularity of the image improves, and you can make out more and more details, until, at last, the entire picture is downloaded.
Here is a page with one regular GIF and one interlaced GIF. As the pictures load, you can see the differences that I've been talking about.
Again, interlaced GIFs have fallen out of fashion.
Copyright © 2001 Michael Masumoto. All Rights Reserved.