I think Ed was right on the button. Why not import all of the captured clips, set regions for the clips and do a batch render to the same filenames into a different folder. You can then edit them easily and then when you want to insert the original avi files you can just swap them out or delete the small files and switch the connections to the new ones.
It sounds like an interesting process for working on slower machines. I’m very interested in how you do it.
I’ve always had better luck working with the DV codec AVIs but if you find something that works smooth it’ll be good to know in a pinch. 🙂
steph