After Effects and MPEG

Hello. I recently bought After Effects (after reading all the tutorials on here showing what you could do with it!) but I ran into some little problems.

#1- AE can't import my MPEG-2 files. I read online that you had to convert it to a .MOV or .AVI, so I tried to use a program called Magic Video Converter to do it. After doing that, I could import it into AE, but the .avi only shows a black screen, and the .mov a white screen. I also tried MPEG Streamclip 1.1, but it gave me an error saying that 'MPEG 2 codec is not installed, buy it or install QT Alternative'
I installed QT Alternative, but that does not solve the error.
How do I get AE to recognize and import my MPEG-2 footage successfully?

#2- Because of my limited hard drive space, I always compress my videos after I render them, using Ashampoo Movie Shrink and Burn 3. If I try to import a compressed video, the video loads, but AE won't detect the audio. It will only detect audio from movies freshly rendered from Sony Vegas. How can I get it to detect audio from all my other files? (PS Ashampoo MS&B 3 compresses the videos as a Xvid MPEG-4 .avi file.

Thanks a lot guys :)