Alright then, well you should decide whether to pick every frame of the video for the first part. I think it is a little too much to go for every first but that is up to you and your tests. Regarding the converting, I would go for jpgs honestly. In the world of 2D graphics jpg may be considered as a lower quality thing, but you are about to put thousands of them into our software and there will be no significant increase in detail when using tiff or raw itself. Resolution, sharpness and distortion matter. If you are able to get a RAW image sequence and have quite some dynamic range to play with, I would go for the converting process from raw to jpg while increasing shadows, decreasing highlights, removing chrom. abberation and maybe even sharpening a little or denoising.