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I have MGI Videowave III SE (scaled down freebie version, came with firewire card) so it may be different than the version you have. My freebie version doesn't make reference to "production files" so all this may be totally useless to you, but I'll tell you how it works for me.
The only thing I've ever used it for is capturing from camcorder and rendering to video, and that works fine for me. When I go to the "capture" section I don't see an option to open file. Under settings I can choose whether to capture from miniDV camcorder or webcam under sources for audio and video. Then after adjusting start position with play controls on the right, click the "video+audio" button under the "Start Capture" section. Click stop when it's got what you want, and it puts the clip over in the "library" on the left, naming it NONAME_000.AVI, then 001, etc.
If you're capturing from miniDV camcorder you'll be capturing as uncompressed AVI (HUGE files!), which then has to be converted to MPEG. To "produce" as an MPEG, drag the clip from the library to the "storyline" at the top then click the "produce" button on the left, choose the options, and let it go.
If you just want a straight-from-the-camera uncompressed AVI, right-click on the clip in the library, choose properties, and it'll tell you where it's located on your hard drive.
Hope this helps!
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-Linda
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