I would not go for Premiere Pro ... it has issues, according to many reports. I'd still look for 6.5 if you could. Either way, good luck on it.
On the AVI vs MPEG comments, yes, correct.
People at Best Buy are idiots (most of them, at least). I would not agree with their comments. The kind of JVC VCR I suggest is not available at consumer stores. It must be bought in a pro video/photo store, or ordered online. While your JVC is not horrible, it is a far, far cry from the JVC HRS7000-9000 series I suggested. Look for a JVC SR-V10U at
www.bhphotovideo.com. This said however, if you are happy with what you got, then stick to it. Just know that the ones I suggest are much, much better. If all your source tapes are perfect quality, then the current VCR may be okay.
A simple TBC is an answer to instability, not to visiable quality. The DNR found inside a JVC TBC is what you want. It is digital noise reduction, and the VCR has filters. Given your source, I'd return that JVC to Best Buy, comment to the manager that his salesman was as helpful as a brick, and then make a purchase at
B&H or another store online. Always remember the front page of
www.digitalFAQ.com has some shopping tips about mid-way down.