Eric,
It can, in many cases, work ok with all sorts of mixed media. I would guess more editors especially with "upper" gear do so regularly.
Another mixed way to work is to start with original media, but when you've got your sequence down, and are ready to start the polishing stages of color/graphics/sound, select your sequence, and do a Render & Replace to your chosen high-quality "digital intermediate" format/codec. This way you only need t-code (essentially) the parts you're using.
That said, I do know that many top line video post folk routinely t-code to a specific format for their editing/vfx/color work. Even with "big iron" as it's called ... it's been a workflow for them for years, they know it's solid and always works seamlessly in the workflow. ( "It's what the night and batch processing are for ... " )
A number of the colorists I know will look at the media for a project, and decide which format they're going to work in, and do an input transform of all media to that format. A lot of times, for their work, it will be say RED log wide gamut, or Arri log. Every clip in the project is first converted to that, then all clips have the same starting 'feel' and work the same through the project.
So back to your questions ... yes, Premiere can work with mixed formats on a sequence, and often do just fine. Especially with a good machine. But it at times is wiser to do a bit more prep before starting the edit to make the edit go better.
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