Throw that USB cable away...I dont know why the camcorder manufacturers bother with them.

Could be the same problem I was getting that the default "free" DVD editing software that came on my PC automaticaly converting the firewire camcorder input into MPEG format, and some data was lost in the compression.

Is your clip defaulting to MPEG, or is it a larger AVI file?

Try checking the software options to minimise compression as the file is "downloaded"