Your DV camera outputs DV-compressed footage at 5:1 compared to the uncompressed size. So it is already much compressed.
It is possible to transcode DV into other formats to save disk space, but in so doing there will always be a quality loss and it will always be less easy to edit if file sizes are significantly reduced by using alternative CODECs.
Premiere 6.5 is designed to edit DV footage. Any alternative format that makes a significant reduction in file size will almost certainly not be editable inside P6.5.
DV occupies about 13Gb per hour on disk. Hard disks are now cheap. If files sizes bother you, add more disk space or clean off old projects to make room for new ones.
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