here we go...do you want to put your miniDv tapes onto dvd?
if so...then you'll want the mpeg2(dvd) output...divx/xvid is not far superior in quality...not a chance
i have a panasonic gs300...i run it through my usb....goes into my panasonic capture software as an avi in temp. files...then i edit it as i please then i save it as an "mpeg2(dvd)" format...then i run it through an authoring app(tsunami) and voila..dvd player here i come
if u wanna watch these on an ipod or you just wanna watch a cd then you can convert your avi to divx through autogk or other numerous apps that do a good job