I use freeware VirtualDub or VirtualDubmod for lossless/lossy AVI editing.

And I use AVS Video Remaker to cut unwanted parts and remove TV ads from DVD or MPEG-1,2,4 video files recorded with various PVR, DVR & DVD camcorders. Its scene detection algorithm saves your time by scanning video and splitting it into episodes.

As for editing other videos files captured/downloaded from the net IMHO there is no rival to AVS Video Editor + DVD Authoring. It allows you to edit video files of virtually all video formats and save them to .AVI (DivX, XviD, etc.), .MP4 (inc. Sony PSP and Apple iPod), .WMV, .3GP, .3G2, QuickTime (.MOV), .SWF, DVD, .VOB, .VRO, MPEG 1,2,4, .MPG, .DAT, VCD, SVCD, MJPEG, Real Video (.RM, .RMVB)