Yeah Joe - I think you missed my point...
I assumed from the post that Bob was already DV
DV cuts and DV to DV via firewire then there is no "generation loss" or lossless editing (the footage is already initially compressed 5:1 as you rightly point out and this way you wouldn't lose anything else)
If however Bob uses an uncompressed workflow then keeping the master sequences & copies uncompressed is a good idea.
So...
DV Workflow? Cut edits only? = DV backups, files, copies.
Uncompressed Workflow = Uncompressed backups, file, copies
DV with rendering of grades and effects? = make your decision on what else needs to be done with the footage.
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