"I'm not using AVIs, I'm using MPGs from the vob files. In retrospect, I probably should just use AVIs but I don't want to lose any quality and don't want to spend all that time converting."
If you are just cutting footage, it's not a problem. If you are trying to combine scenes of different sources (DVD and LD footage) or digitally add/remove stuff, then you really should go to AVI. At that point, hard drive space will become a major concern as well.