In my opinion AVI format is the hardest format to edit. I have tried several differant ways to edit AVI and have found that after editing and mixing down, the compression rate looks like a bad chinese subtitled movie. So far to date I havent found a way to edit AVI format to my satisfaction. That being said for the price and for the size the video playback is most impressing!
The best tip I can give anyone when purchasing video gear is to double check the playback format and to avoid AVI. Mp4/MOV formats seem to work good for me and editing is alot easier since its a Quicktime format. Hope that helps.