I know I have a strange workflow, but it works for me. Lets say I end the day with 5 DV tapes. I ingest them as AVI. I then edit one tape at a time and render as another AVI file.Once I have these 5 files, I simply put together and produce as a DVD. I recently did this but instead ingested and rendered as MPEG files. I thought my DVD was a bit grainy and wondered if it was the lighting or particular circumstances of the shoot, or did I lose more quality working with MPEG instead of AVI. It was nice working with smaller files, but not worth it if I lose quality.

More completely, your previous workflow involved the use of the DV codec in an AVI wrapper. An AVI can contain any of several codecs.

Yes, MPEG is an inherently lossy format. At lower bitrates, such as those used on DVDs and lower, they make a poor intermediate or editing codec, since they will show visible artifacts in as few as 2 generations. AVI-DV, on the other hand, is not quite lossless, but you need to go through at least 11 generations to have detectable artifacts.

So, yes, AVI-DV makes a great editing and mastering codec for standard def, most MPEG versions do not, for the reasons you've discovered. Do your standard def editing and mastering with AVI-DV, and keep MPEG solely for DVD distribution.

Thank you Seth, that answers my question and puts my mind at ease.