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Advice Needed on Editing Different File Types Together

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I’m working on a video project that requires editing of the following file types together:
1. BDAV, .m2ts, VC-1, 1920/1080, 16:9, 23.97 frame rate, AC-3 640 Kbps, 6 channels.
2. DVD MPEG-PS, .vob, MPEG2, 720/480, 4:3, 29.97 frame rate, AC-2 224 Kbps, 2 channels.
3. AVI, .avi, Huffman Lossless HFYU, 720/480, 3:2, 29.97 frame rate, PCM 1,536 Kbps, 2 channels.

Blu-ray and DVD files were ripped to disk using AnyDVDHD. AVI file was captured from VHS player using Virtual Dub with huffyuv filter. The end product should be a 1920x1080 hi-def file meant primarily for playback on a PC (no disks needed). No menus, titling, star wipes or any other authoring stuff. Just straight up video clips re-arranged to my liking. High PQ is of primary importance. The blu-ray files comprise about 75% of the footage.

Looking for some advice on workflow and software:

Should I just import all these files into an editor, edit, then render the output? If yes, then:
- what codec/container would provide the best output in terms of PQ? I assume VC-1/m2ts (perhaps the blu-ray clips wouldn’t suffer too much during re-encoding, and they provide the bulk of the footage). Or, is it possible these disparate files would be better served by rendering to some other high def format?
- what editors under $150 would accept these files and output to the preferred format? If none, what above $150?

Alternatively, prior to editing, I could convert the VOB and AVI files to VC-1/m2ts (or convert all files to some alternate format), then import them into an editing program that simply joins segments together without the need to re-encode them. Would this be a better way to go?. If yes, then:
- is there a converter that stands above the rest for converting formats to VC-1/m2ts (or the preferred alternate format as above)?
- is there a reliable editor that can join VC-1/m2ts (or the preferred alternate format as above) without re-encoding? My luck with these programs has not been good.

Any sage advice would be much appreciated.

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