OK, Darth Simon, mebe has answered most of these already, but I will address them anyhoo.
1) The RAW capture is actually in AVI format using the huffyuv codec. This is a lossless compression codec (kind of like .zip or .rar for normal files) so you at least get some creduction in the file size, but with ZERO quality loss. Otherwise the movies would be between 180GB-250GB each!
2) It is watchable on a PC right now with media player etc. But they are really *raw* captures. What I mean by that is that each side of the laserdisc is in a separate file, and has a lot of black etc. at the start and end of each file. So although technically it is watchable, in reality it isn't yet what you would call an enjoyable experience. At the least you would want to trim the tops and tails off each segment and rejoin it into one single 80GB file for your viewing pleasure. It also needs to be converted back to 24 frames per second progressive to look any good on a PC, as if you watch it now you see the NTSC interlace scanlines.
3) Re colour correction etc. In theory even as is, it will look better than watching the original laserdiscs on say a pioneer 701, or any sony player etc. But in reality it can look better with a colour grade, this will make the film a little more vibrant (the US laserdiscs were a bit 'washed out') and get some consistency into some scenes where it is currently lacking. On a normal TV it won't be an OH MY GAWD difference, but it will be noticably better. On big sets the lack of noise and MPEG2 induced artefacts will make it a *lot* better than the current bootlegs out there as well. Remember though at the end of the day it is a laserdisc source, what this version does is extract the best possible image from the laserdiscs, but its still laserdisc. So really, DVD viewers will finally get the same or better experience as the laserdisc viewers.
4) DVD-9. Well yep, you lose some quality jamming it down to 8.5GB from 80, but for 90% of the population this is the only way they can play it. The truth is, that once you crop out the black bars to make them truly black (So that data isn't wasted on them) and use a high quality multi multi pass VBR encoder, the differece will be very small indeed, and will look the same to all but the pickiest of eyes. However if you can playback from a PC hrough a projector, the huffyuv file will probably have a slight quality edge.
5) Putting it onto DVD would be the last stage of most individual projects I would imagine. You would keep it in uncompressed format until you had finished making adjustments. So after you have tweaked the colour to your liking, fixed any frame glitches, and perhaps fixed some special FX if you wanted, then you would put it on DVD to enjoy in your loungeroom.
Thanks for the questions DS, it probably cleared up stuff that other people were wondering, and helped get my priority list in rder as well