The main question was: What options do I have for rendering a Huffy file to a final avi? I would prefer to keep it lossless. But I don't want the rendered avi to be bigger than it needs to be?
For example, I took an mp3 audio file that was 7mb, trimmed 2 minutes, re-rendered it as lossless audio and it came out to be 57mb. Should I be worried about doing this with video, making a file bigger than what it originally was.
What can I do about the video image being shifted up in the PDI captures? And is it normal for the half size PDI images to be blurry while the DV frames look sharper? (This only appears at half size.)
DV

PDI

The other problem with the PDI captures from Hi8 video is that I think they're a little too bright. The Super Smash Bros. Melee examples posted earlier don't show such a brightness disparity, just improved color and contrast. I also think some of the white areas now have a slight pink tint.
DV

PDI

I'm not sure what to adjust in the virtualdub capture settings. It seems the gain might be too bright on the PDI captures or should I worry about the brightness or gamma? Can you tell what settings should be adjusted or is there really nothing that can be done besides trial and error.