You can preview/watch huffyuv without converting to mpeg. DivX is a lossly compression that is what's wrong with it, for best quality it is best to stick with lossless compression or none untill you are ready to output your final file.
Best thing to do would be to capture using huffyuv and then frameserve with AVISynth using denoising, deinterlacing, etc. filters as needed.
There should be a YV12 capable version of huffyuv soon, although I guess that woudn't help if you are converting to mpeg as I don't know of any mpeg encoders that accept YV12 inputs, despite the fact that is what they output.
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