My capture settings and sequence settings are exactly the same: DV-AVI 4:3.
After capturing a video and dragging it to the timeline - timeline shows red line that indicates a need for rendering.
But If I do just save and reopen the same project - the red line is gone.
Windows Indexing is BAD http://forums.adobe.com/thread/676303 - so be sure you have indexing set to OFF for all drives and directories
Other than that idea, using Firewire to capture video into DV AVI is the "native" format for Premiere, so what you are seeing is a bit odd
I no longer use much AVI (CS5 with AVCHD) but back when I did (digitize tapes via Pinnacle Dv500 card) I never saw a red line since the AVI files I created were a perfect match to my project (with CS3)
What you are seeing is most odd...
Europe, Middle East and Africa