Hi B
I think it depends on the converter.(Possibly) Here, I re-numbered the clips using Irfanview . The original MPEG4s from the camera were HD 1280 x 720 . (The camera does higher res but 3-400 clips over the 24 hours of filming would have filled it up before the event finished)
Using AVC I converted these to mpeg2 1280 x 720 as these edited with VP more smoothly than the original MPEG4. (AVC keeps the originals so nothing is lost) For a typical MPEG4 clip doing this reduced the size from 10Mb to around 3.5 Mb. Then I noticed AVC had another conversion setting to reduce the quality but keeping the same resolution.This made the same mpeg2 clip around 1.6 Mb. but still 1280 x 720. (a bit blocky when previewed in VP at the higher setting.) That's why VP shows both clip types with the same resolution in my image above.
These lo-res clips edit with no hangups at all. The only complication is that AVC adds ...-mpg.mpg to the name and this needs to be split off. A batch rename in Irfanview takes about 5 seconds 😉
The final result is two files, one with original MPEG4 clips and the other lo-res Mpeg2 clips both sets having the same name (or numbers)
So far the only down side is that reloading the final .vpj using the MPEG4 clips leaves the odd gap in the timeline so it needed a bit of touching up. Just exported Part 3 of this project (105 clips) and it looks fine. Not sure why there were gaps but I suspect might the slight difference in duration between the clip sets.
Nat