I noticed that during rendering the output file remains almost empty until the rending is done.

Does this mean that rendering is done mostly in MEMORY??? I don't think that would be ehrmmm... optimal...!

Also I haven't managed to have kdenlive produce a PROPER avi file with mjpeg and pcm in it. The avi files always give errors from ffmpeg and mplayer. And they're not interleaved as well.

Does kdenlive use it's own avi muxer, or maybe from melt, or does it use ffmpeg's avi muxer? In the latter case I'd expect a proper avi file?!

MLT uses FFmpeg libs (both codec and muxers) and tries to use them in a manner similar to the ffmpeg command line utility. However, I have not tested MJPEG/PCM AVI output much. The rendering typically outputs the file gradually and not in memory. Maybe this behavior is specific to MJPEG AVI?