...but why do you think the writer of that video tutorial had us do this? What would be the point?
I have no idea of what the tutorial's author intentions were. Ask him, afterwards I will be able to comment on.
After the video is rendered, it wouldn't matter if the photos were TIF, JPG or NEF right? A rendered video is a rendered video...or am I wrong about this?
That depends on how much of the quality loss is acceptable to you. JPG is a highly compressed format with significant generation loss, i.e. you loose a lot with every next render. TIF is a sort of 'production codec'. However, data in superwhites and underdarks may be clipped on rendering. Whether it is acceptable or not does depend on what you are going to do with your footage in post.
here it is....how do I improve this?
And what exactly? The playback is smooth on my side. It shakes at about 0:02, but that has nothing to do with choppiness. Stabilise it.