Why does the quality drop when converting from mpg to avi?

I'm very new to video editing and finding it all quite daunting.

I use a Sony handycam and have found the whole process very long winded. At last i've worked out that the files I get from my mini-DVD's, I have to convert to avi format before I can then edit them, join them together etc. But the quality then drops. Am I doing something wrong or is this normal? Is there anyhting else I should/could be doing?

You do not give a lot of information regarding this.

Avi is concidered a lossless format, or in other words you should not lose quality converting files to Avi ... converting Avi file to another format can be the opposite.

Why are you converting the Mpegs? There is plenty program available to edit/join them.

What program are you using to convert them to Avi?

My Sony Handycam is supported by a package called Picture Package, this has to be used to extract the files from the discs to my PC. Once this is done the files are then in mpg files. I was told that these would have to be converted to AVI files to be able to import them anything to edit them.

I am using Windows Moveie Maker to edit them, just because I was advised that if I only want to basic editing then this would be enough.

But once I've converted them ot AVI's and view them in Movie Maker the video is nowhere near as smooth, it tends to jump from frame to frame. I used a free download package form NCH Software called Prism to convert the files.

There are many better soultions, do you have a budget you can spend on this, as i could recommend a better way?

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