Hi Christopher,
Yes I too am keen to try this as I have certainly had examples of HDV Footage that I have tried to colour correct only to find that it gets pretty ugly pretty quick.
in terms of transcoding losses, in this case since you are going from a lower quality to a higher quality codec so you would expect that the higher quality codec could capture all info from the lower quality codec and get no worse (but get no better either).
It's only when you start to manipulate clips that you would see a difference.
The point I guess about not transcoding everything is to save time - less time transcoding on the way in and transcoding on the way out again.
Dave