I watched a short clip of Pallywood on Rocketboom, but from what I’ve seen it’s hard to say for sure whether the footage was staged or not. Some footage looks more real than others.
Pallywood, “According to Palestinian Sources…” a film by Richard Landes. International news media extract a few convincing instants of staged scenes — sight-bytes, and present them as news…
You can download Pallywood if it sparks your interest.
Update: After watching the whole thing, I’m still not convinced completely either way, but if what the documentary shows and says is true, then there is no doubt that some of the footage, used in 60 Minutes and other newscasts, was staged.