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As long as you're staying with a standard def avi-DV cam, I can see nothing gained in moving up from 6.5 for you from what you've described. That is, there may be a few new effects, or some effects may be handled better (or worse), but mostly the editions after 6.5 are more about being able to use different kinds of footage like that coming from a DVX100A or HDV and so forth, and also about delivery codecs for hi-def and that sort of thing. The timeline seems to be easier to edit on in certain ways, but overall not much has changed when it comes to editing regular SD DV. If you ever get into hi-def, then you'll have to move up because 6.5 won't handle formats like HDV etc.
"Or can I just import my vids from camera directly into Flash without the need of Premiere?"
Then how would you edit the footage? Flash isn't a video editor. After you edit your footage, then you can bring it into Flash and I guess do webby things with it like adding links and interactive scripting, but you certainly won't be doing any real video editing in Flash. As far as I know you can capture video from a camcorder with Flash CS4, but that's where it ends. I'm not even sure you can trim footage with it.
As far as uploading to YouTube, you generally wouldn't want to upload an flv. There used to be some advantages to it such as uploaded stereo mp3 files within it, but they don't allow that anymore. It's better to use a video codec like mpg or wmv for the most part.
When it comes to video in Flash, it's basically just a delivery product. It will take your already finished video and change to to flv, swf, and I think it now does mpeg4 as well. Of course there are many 3rd party apps that will do that for free.
Here's a short video tutorial on what Flash does with video:
Thanks so much for your insights Charles!