Any word out there on FCP incorporating as less lossy HD codec like Avid's DNxHD for mastering HD with less compression and greater color space. Will FCP adopt DNxHD the suposedly free codec for the taking from Avid?

FCP can work uncompressed in the first place. From what I've seen of Avid Media Composer HD, it can only capture with DNxHD compression (Nitris does not have this limitation). So on the capture side, FCP is just as good as Avid if not better/cheaper.

For mastering, you usually make your deliverables on tape. You can also make quicktime Animation codec (lossless codec) files if you want to archive with pristine quality. I suppose DNxHD may also be viable... I don't know if it works straight out of FCP (although I suppose it would???). I've never compared it to photoJPEG, which may be better.

Working with, and storing lots of footage in uncompressed HD can be challenging in FCP, even with a few TB of XRaid storage. I currently use an uncompressed SD workflow however an uncompressed HD workflow doesn't seem practical right now. DNxHD claims to offer near uncompressed 10 bit quality with storage and performance requirements similar to uncompressed SD. I belive other companies are begining to offer less lossy codecs for the same reasons. Even HDCam SR seams slim at 440 Mbs compared to uncopressed HD at almost 1.5 Gbs, but I believe Sony is not sharing at this time.