How do you handle footage shot with a somewhat smudgy or dirty lens?
 

When I played the footage on the TV, You really have to look hard to see it. On the PC however you can see them better (though I don't want to see it). Is it because of the TV being a bit darker in brightness. If so do i darken the footage. Any suggestions. I need this footage and it would be hard to reshoot.

How I Handle Footage Shot With a Dirty Lens
 

I would re-record over it and salvage the tape. Unless it was footage of Bigfoot or a Tasmanian Wolf, barely viewable video wouldn't have much use to me. You could always re-stage the action with actors, greenscreen and multi-layered editing.

I've got some footage that had a lot of camera shake and dirt on the lens (my wife's uncle shot it). I applied Deshaker in VirtualDub and now the image is wonderfully stable, but the dirt spots shake around madly! I tried getting rid of it by dubbing another part of the screen into that area. It worked on a couple of clips where the dirt was in an area of the sky that was empty, but on most of the clips I was stuck with the dirt spots.

If it's an area of empty sky or ground, you might try copying a similar area of the screen into that spot. If there is anything moving across that area though you'll be stuck with it. Live with it and be more careful in the future.

Photoshopping
 

I heard you can photo shop the images frame by frame. It's not for all of the footage but for some.