First thing is first, what is your delivery format? That pretty much dictates how you'll deal with mixed footage.
The second option, and less ideal, is to edit in the format of your highest quality video and then conform to delivered files from there.
I would make a point of telling your client that you cant guarantee 100% quality... sounds like they're digging into archived material or stock footage of mixed quality. Let them know the trade offs of letterboxing vs scaling some of the smaller clips and so on. A client who knows the issues up front thinks you're well prepared, tell them too far in and it makes you sound like you're covering your butt.
Angelo Lorenzo
Fallen Empire - Digital Production Services
