No, not really. If you shoot at 30p or 60p or progressive scan mode, in 1920 x 1080, you can get a decent 2mp frame grab of the video footage. That's good for an 5x7 print. Actually, it can stand to 8x10 if you handle the shot well. If it's 720p, a 4x6 or 5x7 print size is possible from that frame grab.
Grabbing ab picture out of a p-video is at the moment not compareable to a still picture. This has mainly to do with a) the compression b) the exposure time. Specially stills of moving objects are far from sharp.
You may be talking of interlaced. Not so with progressive scan. 2ndly, most albums now are in laid out in digital style albums. Many of those sizes are no bigger than 4Rs. For certain shots, say the processional, you can do a frame grab. And because it is small, these problems you are talking about don't show in prints.
Of course you can get them out and print them - you can print them in 13x19 if you like, but you won't get a good picture.
But why should you? You switch to stills when you need it. For formals, for group shots, switch to stills. For other things, you can switch to video. You seem stuck to a fix photo and fixed video mindset. We have, for the past 6 months because of P in video just switching back and forth. The image quality isn't that bad especially if you put that in a lay out in small sizes. You want big sizes? Shoot it in stills, or press that photo button.
In the tradional video camera, we had some limitations in IQ when we switch to stills. What we wish is we have a good stills camera on our videocams. But these new vidslrs solve that. The 7D and the GH1 fits this bill. Again, a true video camera as far as other features will beat the vidslrs, but the gap is not that big anymore. They, in fact complement each other. Perhaps in the mk2, we will see better integration and convergence at least beneficial for the events shooter.
You are also in the mindset that we edit video and video only. We combine stills and video as a matter of fact. In fact, we don't mind combining any other material that can be converted or rendered to video. Sony Vegas is very tolerant and easy to use other video formats, photo formats, sound formats with good results and without jumping through conversion hoops or compatibility hoops, or having gochas in the final ouput.
While you can use this way for a personal memory I am quite sure that pictures taken out of a video aren't sold frequently by pros.
Maybe a couple of years ago. But we are slowly integrating them because the frame grabs are really getting better. Sure, the frame grab is only 2mp, but as I said, for smaller prints, on a layout, you would not notice in most instances, especially if the shot/footage is well lit and done well. I can only presume that you are not aware of these developments.
I know you can press the shutter for a still while video is running, but than you have a gap in the video.
You are also in the mindset that we edit video and video only. If not we are not really making a video.

But in truth we don't think or work that way anymore. We combine stills and video. So, even that gap isn't a gap because we think multimedia. The video I am editing now is composed of both video and stills. We don't edit video using video only materials. We use what is needed to get a multimedia output. If that even requires a powerpoint slide, or a flash output, then we use them as well.
And there is an old, old, trick us video editors use if we see a gap or we have bad camera work on a segment we are editing - the cross-cut. If I see a gap in the video, like if I press that shutter button to take an 18mp photo, I can just cut to another scene, say an audience shot, or to the 2nd videocam or vidslr but from another POV to fill in that gap. Voila! You won't see that gap! Again, this is nothing new and is a known trick for decades, even way back when there was only film and no video!
What many are not aware is that the convergence has also made us video editors use materials not of the video variety as well and edit video in new ways that are not linear or traditionally edited. This is really not new. If you see old documentaries, you see stills as part of the narrative. Many have been doing that for a while now, and it does not deter from the story telling. In fact, it enhances it.
The concept of timeshifting, music driven video in some segments, documentary, cinematic/dramatic, etc. are not new ways of presenting a wedding or an event. Again, I can only assume that you are not aware of these developments. You'd also be amazed how we shoot them with some even using cranes, tracks/rails, etc. aside from the traditonal use of external sound recording devices. In our country we also light them as if you are shooting a movie!
Therefore, vidslrs like the 7D, 5D mk2, D90, and GH1 are much talked about. And if you don't do video, people won't really get it, even if explained to them. OTOH, this is why many are excited. Liquidstone, my countryman, who is a birder and not an event shooter, understands these issues. And though he will likely not use a steadycam device like I do, doing video seriously and with a respect for the discipline makes him appreciate the problems and solutions that are available to him in his own type of photography/videography.
We don't see limitations. We see potential and possibilities. The 7D just made it easier.
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'Always in the process of changing, growing, and transforming.'