I want the details section to suppress if the status is interfaced, so I have the following in my details section's suppress formula (among other conditions):

{@Status}="Interfaced"

It suppresses the section when the status is interfaced except for one record. In other words, there's always one record with a status of Interfaced printing.

What is wrong here and how do I fix it?

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As Ryan stated there can be lot of reasons... but one thing I can suggest since you are trying to supress a string value it can be possible that the all entries of "Interfaced" is written in one format (May be small letters) and that on is written in another format (Capital letters). This is a blind guess. If you can provide more information it would be helpful to answer.