Hi aczyzyk.
I'm in a similar boat.
I have been shooting .AVI video on an old little Canon S1 IS for several years. I like the quality, and I don't have a "real" uw video rig, and not gonna buy one. Yet. 
Assuming you are playing on a 640x480 (regular not HD) tv set, the 640x480 avi file is just fine. Looks a tad fuzzy on HD tv set (esp if you're looking at it right after some HD movie plays!), and worse on large sharp computer monitor. :-) [And imho, I'd rather have 30 fps and smaller file size, at least for fish, whose smooth motion is paramount to good videos.]
I've been using Pinnacle Studio 9 (it's up to v. 11 now) on my PC, and although buggy (you have to know some insider tricks), it works well with the .avi files and gives lots of choices about recompression, burns nice dvds, etc.
Unfortunately, I'm moving to Mac, and they don't make Pinnacle Studio for Mac. So I'm shopping around for a replacement program, or considering keeping my pc just for the video.
The software you get depends on what type of videos you make. If you want to edit your video clips together, then just lay a simple soundtrack behind them, you don't need a very fancy program. iMovie might actually do it if you can figure out how to avoid the recompression problem. If, however, you want to make more of a music video, where the sound and the audio are synced together to compliment each other, it gets harder to find a good program without spendng $$$.
So far I've determined that iMovie isn't the right program for this. Trying to figure out if Final Cut Express is. Apparently Sony Vegas doesn't work on Mac? (not sure yet about that). Adobe Premier Elements might be an option too. I haven't looked into those seriously yet.
If you don't get an answer off here (shooting movies with still cameras isn't real popular among uw photogs it seems), you might try searching or posting a question on the Pinnacle Systems forums - people over there are pretty knowledgeable about different editing options.
Hope that helps a bit.
Taxgeek