Converting xvid avi files for premiere pro 5.5 properly?

I am using Premiere Pro 5.5 for the first time.  I have footage from an older Flip camera with the following specs that I need to convert.  I have MPEG Streamclip to convert the files.
What format should I convert them to?  What settings in streamclip should I use?  Should I keep them as AVI files or convert to mp4 or mpeg or something else?  I don't have the fastest computer setup or a ton of storage space to work with, but would like to have the right format for my imports so that I don't have problems editing.  Thanks for the help. 
Source footage:
File type: .avi
Format: XVid (Perian), 640x480, Millions Microsoft ADPCM, Mono, 44.100 KHz
FPS: 30
Data Rate: 7,760.50 KBit/S
Size: 640x480 pixels (actual)
Working with:
-Premiere Pro CS5.5
-MacBook Pro 2.4 GHz Intel Core 2 duo, 4GB ram, OSX 10.6.8
-1 TB external hard drive to store footage and projects

premiere should be able to use the installed xvid codec software to read the files. some xvid files will report they are mp4 files, so sometimes it possible to play them back using quicktime or another mp4 video player without xvid installed at all. if they playback choppy in premiere and export improperly, then you may want to try uninstalling the xvid and see if they behave any better. can also see if installing an older or new version of xvid works any better.  i use a windows computer, so while it should work the same, i dont know for certain...
xvid and mp4 are heavily compressed, which means it takes more computing power to play them back and edit. prores will make larger files, that aren't so compressed, therefore will be easier on a computer to read and edit with.

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