the websites people told me to use are:

- video codezone

- vixy.net

- zillatube

- moyea youtube downloader

- savetube

1st question: which is the best overall?

2nd question: once im ready to convert which output format is best suited to play? - audio video interleave (.avi) - motion picture expert group (.mpg, .mpeg) - mpeg-4 (.mp4) - mpeg4 mov (.mov)

Neoretix TubeHunter Ultra, none above, none on par!
My best recommendation!

Edit: The downloaded video will be FLV mostly, which plays without problems in Media Player Classic on standard codecs! But remember to regsistrate the TubeHunter, or it refuses to download the whole clip, leaving out the FLV base files! 

downthisvideo.com

do you have to pay for that?

seriously all the web pages are the same...if it works, use it
theres no difference in quality

i personally convert them to avi once im done.

 no, i use it all the time for free. you can also download google vids from there

you should use Gettubevideo.com

I've used keepvid a lot of times and it works perfect for me, also like Mummelmann said you don't need to convert them to anything 'cause media player clasic shows them without problems, and in .FLV format the size of the file is fairly small.

If you don't want to use an FLV player, just use Zamzar.com. It lets you chose what format you want to download it in. You do have to give an email address for it to send you a link to, but it works quite well.

Firefox plug-in "UnPlug", just one click and the video is on your desktop! Try it that's the best!