I have a Haugpauge HD PVR model 1212, it captures via usb into a .ts container using the h264 video codec and aac audio. I tried to apply a speed effect to the clips within kdenlive and the video playback is just grey. I realize h264 isn't the preferred format for linear video editing. What codec do I want to transcode the files into for working with them in kdenlive so I apply effects like speed and other effects? They are 1280x720p resolution so I don't want to transcode and lose any quality, I will be re-encoding them back into libx264 and aac audio for upload to youtube. What codec and container do you suggest I convert the .ts file into? Can I just use avidemux or handbrake? Any help is appreciated.

Are you against using kdenlives very useful proxy feature and avoid transcoding?

no, i am not against using proxy feature. sorry I am unfamiliar with how to use it. as long as it allows me to apply a speed effect and watch the effect in real time in my project monitor so I am sure it's what I want prior to rendering i'd use it.

The proxy feature transcodes your clips for you but at render time uses the original source material, you can also individually switch a proxy on and off for a clip etc if need be.

So a suitable proxy format / codec choice will be trial and error, perhaps start with the default and create custom proxy profiles for testing response of your machine and then apply that proxy profile in your project settings.