Software to edit AVI without losing quality

No, not really, unless you compress with higher compression ratios than whatever's imported. However, that'll obviously give you larger files.

Technically any compression will degrade the quality, it's just by how much. The best way to work with avi's is to get un-compressed, edit, then compress later.
 
If you just want to do simple cropping, I believe you won't need anything more complex than the freeware Virtualdub. It's designed to process uncompressed AVI files.
 
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