Michael, this is what I'm talking about… intermediate codec. It's a frequently used technique.
As for software I can only speak of Power Director (which is a turd) and Adobe Primere (Which is really good). I havent used Primere in about 8 years but when I did it was top notch.
As far as audio is concerned, you hit on another old hobby of mine. I used to do quite a bit of stealth concert recording. There are instances where a band allows live recording but a venu does not. There is a whole hobby dedicated to making ultra small and very high quality recording equipment. I made several rigs with high quality mic caps plus preamp no bigger than a golf ball.
Why this may matter to you is that we are, afterall, on a lightweight backpacking forum.
Check out this company (I have no affiliation):
http://www.soundprofessionals.com
They used to make some really nice mini-shotgun mics. They have a lot of mini-mics and preamps.
I went through a whole line of recording decs. Cassette, Mini-Disc, HDD, and my current rig is a Zoom H2. The Zoom is really nice and is very lightweight. I'd be happy to put it on the scale i fyou are interested in weight. The Zoom also runs on AA batteries which is great for field work.
The Zoom H2 has a decent preamp built in. Another cool trick the H2 has is that it can record in surround sound using its 4 directional mics. I havent tried to use this for video but have read of others getting good results. You can take advantage of the Dolby surround sound capabilities of DVD.