OK, that's a lot of questions to answer, so I'll start from the begining.
OK, I'm really a total amateur so I don't use much professional tools. I used a freeware DVD ripper to rip to uncompressed AVI and then used a program called AVI Recomp to upscale. I cut in Power Director, which is not a professional tool but it's got many usefull functions and it is quite user friendly. I tried Sony Vegas but for me it was just too f**king complicated. From Power Director I saved a 25 GB Mpeg2 and then compressed that with RipBot X264.
I'm making this mostly for my own use and I'm quite satisfied with the results, I only wanted to share it with anyone who'd be intrested, I'm not pretending it to be a professional work.
And to the screenshots, yeah I kind of figured the source files would look better (and that goes to the HD files as well) but I must work with what I have.
I've made both a DVD5 720p version to watch on my computer and a DVD9 1080p to watch on my tv.
And yes, I did tweak the colours here and there just to make it fit with the rest of the footage. I mostly just worked with the contrast as the AVCHDs are a bit more contrasty than the DVD. Only in the case of the Wampa cave I deblued the shots a little and also applied a denoise filter because there wasn't much detail, only grain (and the GOUT kind of grain at that,) so I felt it fit better if it was just smooth.
And as to what SE scenes I'm keeping, well I kept all those I didn't change, so all those not mentioned in the first post. I only forgot to mention that I did ofcourse remove Luke's scream when he falls down the shaft.
Also, I managed to fix the sound, so it is now fully 5.1 and there should be no dropouts anymore. It was a pain but once I figured it out it was doable.