You'll speed up your workflow by converting your mpeg files to DV AVI. You're 10Gb (per hour) file will become abnout 45 Gb though but editting will be smoother and less strain on the PC.
I recommend you ALWAYS edit in high def and leave it up to your export setting to decide your final format. That way you do not have to re-edit your project (starting again) if you previously had SD and now want an HDV version.
Also, if you are serious enough about you editing to have bought the Production Studio and are working in HDV then you really should purchase teh Cineform AspectHD product. The strain on your PC goes right down and you actually get software only real time editting. I suggets you try the demo. Pop along to
www.cineform.com and grab it. You'll be pleased if you do.
Also, I'm curious about your high def DVD player. Tell me about it. What model? How does it send high def out and what to? etc etc