The short answer is we have two options, compressed and uncompressed, or we leave the file in its original DV format (uncompressed), or compress it during import (compressed). This is a decision you make before Importing in the Import window that pops up.
We recommend keeping the "Compress Video on Import" checked, this deinterlaces and compresses the incoming files using MP4 or H.264, which is very high quality and creates a smaller file. If you uncheck the box, if leaves the files in their original DV format. Learn more here.