I would suggest you stay away from no-name SD cards. If you do a little bit of searching, you'll find some shocking horror stories of clone SD cards that look as if somebody took the quality control rejects and stamped their own name on them. A bit more digging, you'll discover the cards barely cost more than the bulk price of the flash chip (and this is not counting the SD card, the controller chip, the packaging...) so it appears to be a highly cutthroat industry.
A useful editor is
http://www.dvdvideosoft.com/products/dvd/Free-Video-Dub.htm [but watch the can-we-install-rubbish-for-you when you exit - click the red close icon NOT the continue button!]. It messes up the video timeline (though most of the time you are unlikely to notice) but it is very quick because it simply rebuilds the file chucking away unwanted stuff, there's no re-encoding.
The red LED will turn green once the file has been finalised. The two times my OSD failed (writing BIG files to SD), the red light remained on. You can fairly safely say the LED going green means you have a useful file. However if it gets stuck, it is almost always beforehand.
The output will turn black regardless of pass-through because at that point the OSD is generating its own output and the video system has switched off to allow the recording to complete. This is normal(ish) behaviour for ending recording (the screen briefly goes black). Of course, it isn't normal when you didn't ask it to do that!
The pass-through only works when the OSD isn't generating its own video, so you will see OSD-generated video most of the time if you have menus active, or are actually recording.
If you can, I'd suggest you try an S-video connection. It makes the quality a bit better (less patterning on colours). Mind out, however, that you disconnect the composite video lead when using S-video.
Best wishes,
Rick.