In general, the settings of a sequence should match those of the primary footage type in the sequence. Though Premiere Pro can mix footage of various types in a sequence and compensate for differences in characteristics, performance and quality are maximized when such conversions are avoided.
From: Premiere Pro: Frequently Asked Questions
In this free workshop, Adobe Technical Support Lead Todd Kopriva answers many of the most common questions users have about Premiere Pro, from “What´s the best export format or codec?” to “Why can’t Premiere Pro import my file?” to “Why is there a red or yellow bar in my sequence?” In every case Todd brings his wealth of knowledge and experience to bear, answering the question in a clear, thorough, and easy-to-understand style.
About this lesson
Creating a sequence that matches the characteristics of your footage can make playback smoother and images sharper. This video shows you how to do it.
Also see these sections in Premiere Pro Help:
Create a sequence
Sequence presets and settings