I appreciate your effort but I don't think this is the way to go. The two streams have just been blended together while they actually represent different moments in time and should therefore be treated as such.
Now you get all sorts of artefacts in movement.
And then you slowed the footage down just by repeating the frames without any interpolation. That is the definition of strobing.

Thank you!

You don't have to bring the footage back to premiere in order to interpolate it.

In after effects, you can use an expression on the opacity for the clip in order to filter out the bright/dark frames, even when stretching footage.

currentFrameRate = 1 / thisComp.frameDuration;
currentFrameNumber = Math.round( time * currentFrameRate );
currentFrameNumber % ( ( currentFrameRate / currentFrameRate ) * 2 ) * 100;

This will start at 0, and alternate between 0 and 100 percent every frame.
The following will do the same thing, but it'll start at 100.

currentFrameRate = 1 / thisComp.frameDuration;
currentFrameNumber = Math.round( time * currentFrameRate );
(currentFrameNumber + 1) % ( ( currentFrameRate / currentFrameRate ) * 2 ) * 100;

Filling in the transparent gaps shouldn't be a problem.
I'm sure someone will find it useful.

seems like artifact and ghosting would be a problem with this method...specially with lots of fast movements in the video.

With the third exposure setting element of HDR missing (i.e., proper mid-exposure) you are going to get lots of ghosting and blending becomes more like strobing...

A workflow (while lengthy and time consuming in render time) that might work better (i.e., would take out most if not all ghosting) would be to:

Create a mid-range exposure frame for each frame. I would use screen and/or multiply (...you might be able to use AE camera exposure as well). After you have created this mid-range exposure set of frames.

Then, export as individual images. This will a get a bit tricky but your time stretch method should work really well for exporting frames.

Then combine the frames for each exposure setting (high, mid (created artificially) and low). into Photomatix. Photomatix will then remove most ghosting and any artifacts.

Then export the resulting HDR frames into a video ... in Photomatix you have MANY choices of various types of HDR plus has the ability to remove most of the ghosting.

Another alternative workflow is to simply export the two exposure shots made using Magic Lantern into Photomatix as individual frames/images and let Photomatix create the mid-range exposure set of frames. In Photomatix you can use 2 exposure settings (instead of the typical 3) to create an HDR.

The workflow I have described above is pretty much the fundamental workflow for HDR timelapse... which is what essentially you have created with ML. Except the timelapse interval time is EXTREMELY faster than any timelaps... which is why there is ghosting and artifacts and less details for HD resolution level video.

In short, I think if you treated the ML created HDR as if it was timelapse frames instead of video... you will have better results in the final video. And... in this way you don't have to worry about frames per second conversions at all. As a result, using Photomatix you can then create any fps final output and significantly reduce ghosting/artifacts and blending becomes a non-issue.

Can't wait for this beta version of ML to become a 1.0...

Thanks for this video! I recently got the guts to hack my T2i (amazing how easy it actually was. lol) and I'm floored at all the features. I followed your video to help guide me in the right direction. I'm trying applying different curves to each clip. So far it's looking to have a lot of potential.

I too thought of shooting at 48fps to end up with 24fps (though James Cameron believes 48fps is the future. hehe.). However, I'm feeling that 60fps is smarter, because more frames equal less motion blurring.

Another idea is to use twixtor before blending the clips together. I'm going to try it soon. :)

Thanks again! I only wish Magic lantern would hack the Sony Nex-5n which has 60p at 1080p and plus amazing low light. It could be an ultimate beast...or even add HDR to the GH2 making it more of a beast. lol.

Is there anyway to do this using FCP X or FCP 7 in combination with Photomatix?

looks great!