Tech issues

A couple weeks ago, a friend of mine brought up a concern about the way I was importing footage.  She's concerned that my exported final screening product might not be of the highest image quality.

Back when I was going to be working with someone else in Minnesota, the would-be collaborator uploaded all 28 tapes onto a hard drive as 28 avi files.  I have been editing by "importing" (not "capturing") these files and then taking segments from them using in and out points for the timeline sequences.  It plays fine in my computer.  I have thought, though, looking at some of the QT videos that I uploaded for actors to see, that the quality isn't great.  This friend is concerned that this is because avi files are "non-native" to Final Cut, whatever that means. 

So at her suggestion, I burned a DVD of a couple exported sequences (.mov files -- the same ones that I had put up on youtube) and then played them in my DVD player on my old TV.  Aside for the fact that the image was unexpectedly squeezed (not letterboxed, as it should have been, but squished into the 4x3 screen so that everyone is too skinny and tall), the image quality seemed okay.  I think.

For one thing:  it's my roommate's old TV and it's not the greatest image, regardless.  For another thing -- this friend of mine seems to be telling me that .avi is interlaced but other "codecs" (??!!) are progressive scan, and until I play the DVD on a newer TV that uses progressive scan, I won't really know for sure. 

Doing a little research online, it seems like playing the DVD in my computer would expose the problems, but I'm not sure.  The thing is, it's not the greatest image quality, but how do I know if the problem is in the monitor/export or in the actual footage?  How do I know, in other words, that Greg didn't need glasses?????? 

Plus, is this something that can be fixed -- if indeed it is even a problem -- by the way the final sequence is exported (changing settings), OR am I basically SCREWED because I've edited two-thirds of the movie this way, and now I'll have to GO BACK and capture all the hundreds of clips I've chosen FROM THE BEGINNING?? 

I am daunted and discouraged and afraid to edit. 

I suppose I have just two avenues open and I should just pick one: 

1) capture from now on because prior damage is done and we know capturing is good

2) keep importing because this is how I've become accustomed to doing it and I have a system and a rhythm so I'll probably be more likely to do it, and if I'm going to have to go back and do 2-3rds, I might as well have the whole film be the same quality, and go back and do it all at once.

It sounds like the first one is best -- but the issue of being put-off and intimidated by the capturing is real; it really might keep me from doing any editing at all.  ...Then again, the idea that what I'm doing is creating extra work for myself might keep me from editing as well.  Not to mention  all the other things that keep me from doing it, as well. 

ARGH.