Re: color grading DV

Is your project short enough to make file sequences reasonable? Only a question you can answer, but I generally use PNG sequences, one clip per folder (keeps access/reading quicker). That is a lossless but efficiently compressed option. You don't gain anything at the outset, of course; you still have a DV source, but subsequent operations are not in a compressed color space. Premiere will import PNG sequences, so you can render back to a DV timeline for the "conform". Plus, you end up with all the advantages of sequences in Combustion: network rendering, faster C* timeline interaction, the ability to do partial re-renders.
An even broader colorspace would be to use a 10-bit capable format such as DPX, but I'm not sure how well PPro would read those.
Also, to possibly speed your workflow: if you have a 2nd computer to net-render, you can batch the finished file sequences via C* to render DV clips; then no waiting for Premiere to do it.
Then again, you may find the difference negligible, and decide that DV in/DV out is just fine for your purpose. Test a clip or two and see what you think.

-jeff