What is the difference between differed processing mode and interactive mode?

Answer:

Every time you access and navigate through the fields on a page in PeopleSoft there are events such as Field Edit, Field Insert, etc... that get triggered.

For example if I am on a page and enter a letter in a numeric field, the field edit peoplecode can fire (to check if the value is valid) when I tab out of that field. When you turn Deferred processing on, the field edit peoplecode will be ignored until you press the save button on the page.

Interactive mode means that the peoplecode will fire immediately when you tab out of the field. Some pages have intensive peoplecode field edit's on them and turning deferred processing on can save a lot of time when you are doing data entry.