YouTube is only suitable for watching if you can stand it. Not for editing. Ripping that material brings up the question of legal issues, are you entitled to use that material?
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Welcome to the forum.
There are several utilities and services, that do a good job with YouTube material, if you can call anything related to the low-quality YouTube material "good."
PrPro CS4.2 will Import the FLV's from YouTube, and with the Moyea FLV-Importer for PrPro (prior to CS4), you can do the same.
Taking any highly-compressed material (the YouTube stuff), and then ripping it to another highly-compressed format/CODEC is always going to muck things up even more. Each compression strips away any vestige of quality, and if you do it twice, there is just not much to work with.
PS - do consider the © issues with material from YouTube.
Thanks for the advice. I'm putting together a quick in-house training video, and have taken an old BBC news article, I don't think the police will come knocking just yet. Really grateful for any technical advice.
One other consideration will be the Frame Size of the YouTube material, and how that might have to be handled, if it does not match your other footage and your Project Preset. What version of PrPro are you using? In < CS4, you would need to set up your Project to match that footage, while in CS4, you could have different Sequences, each matching the differences in your source footage - things changed a bit, and CS4 now has a way to handle differently sized source footage.
PS - I just felt that mention might we worthwhile. As I am anything but a media attorney, I have no idea what constitutes Fair Usage.