What is inside your AVI files?
Read Bill Hunt on a file type as WRAPPER http://forums.adobe.com/thread/440037
What is a CODEC... a Primer http://forums.adobe.com/thread/546811
What CODEC is INSIDE that file? http://forums.adobe.com/thread/440037
Report back with the codec details of your file, use the programs below... a screen shot works well to SHOW people what you are doing
When you first put a file on your timeline, before doing any work, is there a red line over the timeline?
There is no line, and just audio and video. I'm a bit confused about your links, though. A little help or explanation?
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Welcome to the forum.
The links that John provided are to first get info on the AVI files, that you are Importing. The AVI format is a wrapper, and much can be inside of it - not all of it readily editable.
One's Project Preset should match their Source Footage 100%, for both highest quality, and editability. By knowing your Source Footage details, including the CODEC used, and the Frame Size, FPS, etc., then someone can tell you if you chose the best Project Preset. If you do not have a red line above the Clips, when you drag them to the Timeline, then it appears that things are good. However, when one is talking about quality upon Export/Sharing, then the CODEC of the Source Footage can be very important.
As for the Export/Share settings, exactly what are you using to get the Timeline into YouTube? There are a couple of ways, and also options. Knowing exactly what you are using will be useful.