You may that HDV is a bad format for editing; I’ve heard it from a few different places. Why? Long conform times before final output, effectively like you’ve put an effect over the whole movie and need to render it all. Also a reduced colour space, though no different to DV PAL. (Larry Jordan says as much, but look for Graeme Nattress’s comment near the bottom.) You may also hear a recommendation to re-encode as DVCProHD or ProRes 422. Don’t!
Import as HDV. Edit as HDV. Apply transitions with native HDV, but don’t bother rendering unless you have to. You’ll get the image quality of an online for editing with the storage space of DV.
If you’re going to colour correct and actually finish the thing for broadcast, transcode now, at the end of the process, to ProRes 422 or some other lightly compressed format. You’ll get better quality results (recompressing to HDV can indeed be ugly) but you won’t have to capture the whole thing in ProRes 422 (at 4x the space) or DVCProHD (at reduced quality).
The golden rule: you can’t get better quality video than you captured. Transcoding never increases image quality, though it can increase the stability of the existing image quality.
The exception to the rule: capturing live video from the HDMI port of many HDV cameras avoids HDV compression entirely, giving you a full colour space free from artifacts. The problem is that you’re tethered to a computer with fast hard drives and/or an AJA I/O box. There is no point if you’ve already recorded to HDV tape.
The good news: Canon’s HV 20 captures 1080p25 in a 1080i50 stream, with cine-like gamma for increased dynamic range, for AU$1999 RRP. Fantastic image quality for a (comparatively) tiny price.
Sample images from the HV 20, shot by me at home in Australia. No extra lighting or lenses.