Aliasing lines

[l33tmeatwad]

When you have to filter, doing lossless AVI is best as you lose no quality (although that's why they are large). Encoding to a format supported by MP4 is always lossy (hence why it's so small) and you will lose quality (unless you are recontainer, which is just a dirty copy so you can't filter). If you just want to hot swap after editing, using AVI with a lossy codec to create small files for editing then swapping out for full lossless files later would probably be the easiest to avoid complications with frame accuracy.

Side note: Do not use DirectShowSource! It is not frame accurate and can mess up when running some filters. Try one of these alternate input plugins:

AviSynth Plugins for opening MP4/MKV files:
FFMpegSource (FFMS2)
LSMASHSource (L-SMASH-Works)