@Tullen
If you want to retain maximum quality and still get real time playback when editing.
I found that using proxies is the way to go.
step by step:
1. MLV to Cdng (Raw2cdng)
2. Smart import script for AE (do a search on the forum) Will make a composition for each image sequence and add it to render queue (set default render format before you do this)
3. White balance and apply Cinelog or Visionlog in ACR (Do this to avoid having to go back again after editing to apply the Cine or Visionlog)
4. Render all clips to h264 - 5 mbits or lower if you feel so. (Remember to keep same file names/reel names of your proxies and image sequences)
5. add proxies to Premiere and make a Track named 'proxies' just to keep things separated
6. Add the AE compositions to a track above the proxies (preferrably name the track RAW) and Group each Raw and proxy clip together
7. Make the RAW track invisible so that you only cut the Proxies and if you've correctly grouped the RAW and Proxies's without first making any cut to either one, then the cuts you do to the proxies will be doing the same to the RAW footage. You will basically cut and playback RAW in realtime on a very modest computer.
8. Go back to AE and colour grade add vfx or whatever you feel like, because the AE composition is grouped with the proxies, the lenghts will match and all you have to do is disable the Proxy Track and enable the RAW track and voila! You are ready to render a full quality image out of PP
Important: Make sure the compositions are exactly the lenght of each DNG sequence before rendering to proxy or else your footage wont add up when you group them and you will have black spots on the timeline.
Also because you've added Cinelog or Visionlog to your footage before rendering, the proxies are flat and very unimaginative to edit. Just to help you better get a feel when editing, I would apply auto contrast or just some easy "look" with high contrast to better give a feel for what you are doing. Don't start colour correcting the proxies, it serves no purpose at all
Note: I wrote this completely out of memory, I haven't had a computer for more than a month now as mine suffered some horrible electric meltdown

So maybe I missed a step on how I usually go by my workflow, but it has worked wonderful for me, retaining all information because of no loss in conversion, from start to finish.
Sorry for taking this a bit too much off topic.