Is this in reference to the import stage, or handling the lossless AVI after the output stage?

It's in reference on how you convert your AVI lossless file to YV12 before encoding to x264.

I typically export footage into a lossless AVI, be it Lagarith or UT Codec, or whatever. I always output them into the YV12 colorspace also

To make things easier, output your AVI file in RGB. You will then be able to handle the YV12 conversion yourself.

Sadly, using the video levels of analog television in digital video is the dumbest thing ever (and I’m referring to the video standards, not calling anyone here dumb). There is absolutely no reason for it. And it is a bad thing.

In analog TV, theoretically there are no discrete steps from one level to the next, so picking the levels as they did was not hurting anything, and they needed it to store some metadata in those levels outside their standard. It was a clever solution for adding color to an originally gray signal, back in the 1950s.

In digital video, reducing the levels reduces the number of available colors. And there is no reason to mix metadata in with the image data. Unfortunately, the standard was created by engineers whose mindset was that of analog TV instead of digital computers.

I really wish, they would finally drop this nonsense. This is not the 1950s. Why are they pushing this inferior outdated thinking on the 21st Century? Especially now that even cinema went digital.

Whatever your source format and whatever your delivery format, all editing should be done in the full 32-bit mode with black being a 0 and white being a 1. This allows for superior editing technology. For example, instead of the outdated methods of darkening an image by just multiplying something by a value smaller than 1, a much better way is to calculate the square of the value (and of course blend it with the original if that darkens the image too much). The square of 0 is 0, the square of 1 is 1, and the square of all in-between values is less than the original. As a result the image gets darker overall while preserving the blacks and the whites.

And that is just one example of how it makes perfect sense mathematically to edit in the full 32-bit range regardless of what range the input and output files use. Many mathematical functions keep the zero a zero and the one a one.

Thanks for the advice GJeffrey,

Red Prince, I really agree with everything you've said. I wish they would have killed all the stuff with the transition to Blu Ray at least, but it seems people will do anything in the name of profits (=backwards compatibility etc).

It'll be great if I live to see the day where there is no garbage with dithering, or color banding and any of that stuff produced anymore.

Interlacing and TV leveling will be with us until every remsining crt is gone from the face of the earth.

Blu-ray would not even be here today if it was digital-only, although the technology favors it.

So if my intended target playback device is a full range computer screen, I pretty much need to be slapping that Studio - > PC RGB preset onto my video, yes?

Yes. Watch your steps, I mean scopes.

why do I get different visual results depending on what I render to?

Good question has got half the answer within, and so does this one.
Because different formats have got different "traditions of interpretation". How's that? -> For example, it is most common in a lower-priced custom segment to expect the decoding of MJPEG with TV->PC conversion midway. You may think of it like creator of the software kind of thought of housewives incapable of determining "which socket is for which plug", and they are to see bright & contrasty pleasing image. Not "dull & discolored", you get it?...

...what I end up with is a video that looks washed out with 16 - 235 range levels

Looks WHERE ?... That a very important point. You watch your rendered product in some... let's call it player. Players are created by humans with their fancy thoughts&beliefs. And your player does something to your video upon decoding&rendering. These are the two crucial places to investigate. Both decoder & renderer can assume this or that format of video requires expanding of its levels range. In case of MPC HomeCinema you can reach both places of interest and 'enforce law&order' with your hands. Other players won't give you such an opportunity.

However if I export from Vegas in Magix ProRes, or Sony AVC, the file looks as one would expect it to look with PC levels applied. Although importing that back into vegas still tells me it has a 16 - 235 range.

So, the video is OK, and player needs fine-tuning.

I, personally, use EVR Custom Presenter. As the most versatile one. Altogether with Color Management (Relative colorimetry; Gamma = 2.35).

Don't worry, HDR is on its way!