Final Cut Pro 7 and Log and Transfer

Hello gang, I know this question has been exahusted like my moms 2 year ole vacuum.

I just can't wrap my head around this new technology. I would really appreciate a little direction, I'm not stubborn and I do understand some things and I won't put up a fight or debate your wonderful advise, but ugggh.

I am currently using Tm 700 Panisonic video camera for corporate work.

I have Final Cut Pro 7, now do I need Clip Wrap to transcode the footage even though, when I transfer the footage in to final cut it from the camera it seems to convert to apple pro res 422. I can see it on the timeline without Clip Wrap or Aunsoft.

Is this right?

Do we use CW and AS to shrink the files sizes and trancode?

Thank You very much guys for all your help, I really need you on this one.

Cheers, The Newbie