I spent quite a bit of time playing around with Lightworks yesterday and have some more solid impressions.
The core functionality is pretty strong. Lightworks is not a motion graphics program like After Effects, nor is it trying to be. It focuses fairly strictly on being an NLE and nothing else. Nevertheless, it does provide a pretty solid collection of standard editing, transitioning, and compositing effects: various wipes and fades, tone and gamma corrections, chroma and luma keying, image keying, multiple blur effects, etc. If you can figure out how the "video routing" aspect of the effect engine works, you combine them in pretty powerful ways. For instance, you can combine the "basic shape" effect and the mosaic filter using the masked blend effect to create a mosaic'ed region. This particular example is actually bundled together into a preset called "Obscure (mosaic)", but you can plug input and outputs together pretty much any way you see fit to get custom effects. All of the effect parameters support keyframing as well, so you can do things like make the basic shape (ex. an ellipse) move around and change size to keep someone's face obscured as they move around in the video.
Admittedly, certain aspects of the editing interface are little twitchy. So is the keyframing interface. Their terminology and some of the UI conventions are rather unique among NLEs, but that's not necessarily "bad", just "different". It's also slightly unstable at this point. I averaged about one crash an hour. Fortunately its internal journaling seems to be very solid. When it does crash, you never lose anything beyond the few seconds it takes to restart the program and reopen your project. It seems to remember literally everything right down to which dialogues you had open, and where. Mostly crashes seemed to happen when I got a little too trigger-happy with the undo/redo buttons, FWIW.
The other big annoyance is exporting your material. It's in a catch-22 right now. They haven't gone open source yet, so they can't use any of the open source encoding libraries that have "copyleft". At the same time, it hasn't gone commercial, either, so they can't afford to include license-encumbered encoders. At least for now, I've found that your best option with Lightworks is just to export to an AVI container with uncompressed YUV video and raw PCM audio. Bring that in to some other tool for encoding and stick to using Lightworks strictly as an editor. I've also seen framerates bug out if you export with the "straight transfer" option, even though my project was 24fps, all the source clips were 24 fps (well, 23.976 technically) and I was exporting to 24fps. For some reason it kept dumping a screwy 11.989 fps stream. Nothing in this project used interlaced fields, either - it was all 1080p. So I'm not really sure how it arrived at that screwiness. In any case, changing the "speed" option from "Straight Transfer" to "Pulled-down Transfer" straightened it out, but that shouldn't have been necessary. I checked the results, and it was frame-for-frame identical to my edit within Lightwork's player, so it clearly wasn't doing any kind of pull-down. Probably just a bug.
Anyway, I've pieced together a pretty good toolchain for doing free, professional-level editing:
Codecs:
Matrox VFW (Video For Windows) codecs - needed by Lightworks for importing (decoding) and exporting (encoding)
Apple Quicktime /
QT Lite (codecs only) - needed by Lightworks for importing (decoding) and exporting (encoding)
x264vfw - An H.264/MPEG-4 AVC encoder; you'll need this if you want to encode to H.264 using Virtualdub
LAME MP3 Encoder - Pretty much the best MP3 encoder in existence. Virtualdub can use this for audio.
Editing:
LightworksEncoding/Decoding/Transcoding:
Freemake Video Converter - A very user-friendly transcoder/(de)muxer that can be a good alternative to Avidemux if you don't really know what you're doing.
Avidemux - Another good transcoder/(de)muxer. More sophisiticated than Freemake.
VirtualDub - Yet another transcoder/(de)muxer. It really only works with AVI containers, as far as I can tell. But it offers even more gory detail than Avidemux.
Misc:
MediaInfo - An essential tool for gathering precise and accurate information about source clip format (resolution, framerate, encoding method, etc.). Lightworks is picky about matching framerates: importing 23.967 fps clips into a 24fps project is okay, importing 25 fps into 24 fps is not. MediaInfo will give you what you need to pick the right framerate for your project. It's best to avoid using pulldowns (which is why Lightworks just doesn't allow it by default), but if you must, you can use something like Avidemux to transcode your sources to a different framerate before importing.
GIMP - 2.8 was just released. It finally has a single-window mode. It ain't Photoshop, but it'll do. Great for creating title cards, static image overlays for image keying, etc.
Motion Graphics:
I really know nothing about this area, but you might check out
Luz or some of the projects listed
here.
For full-blown CGI effects there is, of course,
Blender. You can combine it with
Yafray or similar to produce actual ray-traced renders if you need Hollywood-quality rendering. Its nodes and compositing engine is supposedly useful for doing motion graphics and 3D + live action compositing, but again, I know nothing about it.
Audio:
Audacity - An awesome audio editor. Enough said.