OK, it's a home video question

As ALL of you know, when a question or task involving video comes up in your family, YOU are the one everyone turns to, right? So it is in this case.

We recently had a gathering at my home to celebrate my parents' 65th wedding anniversary. Can you believe that?! Pretty cool, I think. Anyway, video was not intended as part of the event. But as it happens my parents sat at the table in a fine reminiscing mood and talked and talked about getting engaged, the travails of finding time together and getting married during WWII, with my father in the service overseas, etc. But I digress..

Each of my two sisters quietly leveled their small snapshot cameras (set in video mode) onto the table and recorded everything. I'm now going to assemble their two source videos into a piece. How luck I am to have a two-camera shoot, right? Here's my question: One camera shot .mpg and one shot mp4. I'll now convert them both to the highest quality format I can to edit in FCP. I can run experiments to find my best format choices but I thought maybe someone here might save me the time by knowing the best way to proceed from these two source formats. I assume I'll use Compressor for this but I also have Episode (which I love), After Effects, and of course FCP.

Any thoughts?