I've editing for a while using DV files from my video camera but now I want to edit together some highlights of boxing bouts I've got.

The problem is that the videos I want to use are encoded in Xvid or DivX. When I import them directly into Premiere Pro CS3 they are impossible to work with, so I try to uncompress them first by using a video converter but that normally gives me terrible quality video.

Does anyone else do the same thing? If so, what converter program do you use and what format do you re-encode into? Can I use some inbuilt functions of Premiere Pro CS3 or do I have to search for another encoding program?