The AVI files will be best transcoded using Compressor. In the Settings directory go to Formats>>QuickTime, and select the Apple ProRes 422 preset. It is a smart preset that senses the resolution of the source file and should transcode appropriately without any human intervention.
Test it out on a smaller file first, and go from there...
I'm not sure about handling closed captions, you may want to ask a separate question about that on the FCP Forum.
Hope this helps...
David Roth Weiss
David Weiss Productions, Inc.
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