I noticed that I wasn't able to use Log and Capture with my card from my new Canon 550D, and decided to do some research into it.
I came across a blog posting from Phillip Bloom, in which he uses StreamClip to convert the video for FCP to use. No big deal as I tend to transcode my footage in another program such as Cineform, ClipWrap or even MPEG Steamclip.

What I found odd about the tutorial was that he transcoded hod 7D h.264 file to XDCAM instead of ProRes.
I usually transcode my footage to ProRes but decided to give it a try, and converted it to XDCAM 30p (35mbps). The footage edited like butter in FCP and was rendered as ProRes.

Now my question is why would one choose to edit in XDCAM over ProRes? One obvious thing is that XDCAM at 35mbps is almost identical in file size to the h.264 file form the camera.
The footage looked almost identical to the ProRes file and was easily editable in FCP.

So is there a reason why one wouldn't choose to edit XDCAM over ProRes in FCP?

The only reason is that XDCam is another form of mpeg (like the h.264 files from your Canon) and it's usually best to transcode to a frame-based format like ProRes for lowering CPU resource needs and keeping renders from needlessly degrading. This is why Apple introduced sequence settings that remain in the original codec but render in ProRes. If you were doing a multi-cam edit, converting everything to ProRes really helps.

If the footage looks good to you and saving disk space is important then your workflow is fine.

pro res works extremely well but it is large and you need fast drives to edit multiple streams of full HD.
Haven't tried XDcam but maybe it's worth a shot!

Thanks for the feedback.
Normally I do transcode to ProResLT, but was curious as to the recommendation for using XDCAM instead.

I wasn't sure if XDCAM was an iframe or GOP based codec. But it seems from feedback that it's a GOP based codec, which makes sense to work in ProRes instead.

So for me transcoding to ProResLT it will be.
Now if only Canon would release the FCP plugin, so I can capture using Log and Capture from within FCP.

Phillip tried both codecs (ProRes and XDCAM EX) and chose XDCAM EX because of the much smaller file sizes, and he already has a bunch of XDCAM EX footage so it worked well with this workflow. "Technically" you're potentially giving up a tiny bit of quality, but nobody seems to be able to notice it, so I think you're good to go. :)

I figured that he chose XDCAM due to it's small file size.
But I was just curious if he hit any speed bumps in post, like final output.

I know that he sets the "Render" codec to ProRes, but even that produces some strange things with HDV footage.

So I was curious if he experienced anything quirky with XDCAM, since it's also a condensed non-iframe codec.

Make sure you're choosing XDCAM EX (and not just XDCAM). Also always render with your Sequence Settings set to render as ProRes. This holds true for both HDV and/or XDCAM EX. You will have weird issues with rendering if you don't. (things don't stay rendered, or they take a really long time to render).

I would still do your final output to ProRes though. But then, I guess it might be faster to output to XDCAM EX if that's the format you've been editing/rendering in. Hmmmm.....I might have to try that. :)