Yup, already do that. Videostudio 11 has smart rendering so previewing massive files is not really a big issue. I get a lot of source files in MPEG-2, so the first thing I do is convert them to AVI to avoid sync issues etc when editing (blast those disc cameras).
So my personal conundrum is that MPEG to DV AVI can show artifacts if multiple processes are used.I've found huffyuv more faithfull to original source when faced with this situation. Uncompressed AVI as archive and huffyuv AVI for editing where you can end up with multiple copies of files.
In business you throw away nothing till the job gets done and with multiple customers the numbers can get scary.
Video shot on DV AVI may as well stay in that format, I believe it will survive around 5+ recompressions without visible damage. It seems to me that MPEG-2 cameras are becoming the norm for consumer/prosumer and naturally I try and find the best solution to keep workflow/quality in balance.
As an aside I think Composite Pro is a beautiful piece of software and understand totally that RAW AVI is it's mainstay intent. With a product this good why degrade the results.
Real world application for non-critical projects such as political advertising, band video's and TV commercials could trade a little file size quite easily.
Thanks for your responses by the way. It's nice to get feedback from someone further up the tree that understands I'm not being critical or ignorant, just looking for options in a time constrained world....