Maybe I am missing something, but I always like to use AE to do this kind of thing, as I have experienced develish problems (mostly random jitter from photos I edit in photoshop) in the past using Premiere Pro. [I have tried most of the discussed resolutions to photo jitter (jitter that sometimes manifests itself only on an analog TV when the DVD is played), such as deinterlacing, adding a slight blur, flicker removal, etc., but to no avail].
When I use AE to generate an .avi, and import it into PP, I never have to worry about this.
Thus, I vote AE. Others may overrule me.
ed