I did a quick test today mostly for myself to remember. My work flow almost exclusively consist of Avid MC and Adobe AE. I edit and do a premix in Avid. Sometimes a slight video eq to even things out before going into grading. Grading, graphics and effects I always do in AE. When going back and forth you gotta keep levels and resolution so that you don't end up with a mess of video levels.
When exporting video out of Avid you can use ref files and this is the most effective way. It's quick and doesn't involve any recoding. When you're done doing your AE thing I render a high quality QT file and import that into Avid to show clients or align video/audio. Often with shorter stuff like commercials I do the final version completely in AE and don't use Avid for anything else than to edit.
Many prefer Final Cut since many use Os X based machines but a Win7 or a stable WinXP machine has many pros to the Os X based machines. You can use Adobes Premiere but when it comes to editing Avid is the fastest system on the planet! It's not a great grading tool, it's not a good graphic/text-editor and it hasn't any useful effects. But it's fast than fast to cut, move and do basic editing tasks.
Avid uses the excellent DNxhD codec and it's free to use with any editing system. Basically the higher settings makes for master files and they are in 4:2:2 10-bit. Lower versions are in 8-bit format and works for daily work where you don't do any heavy grading or blow-up.
If you can't use quicktime ref files. That is if you have to move files to another system, you can take advantage of DNxHD codec. In order to keep colours/levels on the same level when tossing files around you have to do like this.
Levels exported / Import setting:
RGB / RGB
709 / 709
RGB / 709
If you try the last option:
709 / RGBThen you will end up with changed levels. RGB is always 0-255 and 709 (601) is 16-235. These two spans refers to as RGB-levels and video-levels. Never mix these!
What happens in the last option 709 / RGB, is that on import the program assumes RGB and takes 0 and place it at 16 and 255 is put at 235. You will end up with a washed out picture. In the reverse option RGB / 709 when importing, the program assumes 709 and does nothing. The levels stay the same.
It's really simple really, just choose RGB or 709 and stick with that in export and import. If you want to import files from Canon 5D/7D/550D use the RGB setting in Avid. If you choose 601/709 black and white will be crushed.
Now, you can bump into problems since most graphics are made in RGB format and captured video is video-levels. But keeping in mind if the file is RGB or video makes it easy in most cases to get it right. Speaking of correct colour is difficult. If I have a client and he/she likes the image in one monitor, I say choose which ever monitor and that what you'll get! Since every monitor/TV is calibrated different there is really no way knowing how it will turn out. But I've been doing video for TV during so many years I know how it will look on most monitors when I have a roughly calibrated monitor infront of me.
In the age of digital it's even hard to go completely wrong! If you push levels to much it will probably break in grading rather than doing so when broadcasted. Often is a certain look not technically correct but will play on the right strings for the mood you're after.