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AVCHD UpShift, from NewBlue, convert AVCHD (hi-def MP4) to more standard HD-mpeg (hi-def MPEG .m2t), a format that is both more universally editable and which demands significantly less system resources.
http://www.newbluefx.com/avchd-upshift.html
The product sells for $49.95.
Another solution that will convert your AVCHD to formats more easily edited on a PC with no loss quality.
http://www.shedworx.com/voltaichd
Note, of course, with any conversion, your output files will be much larger, so allow for that extra hard drive space.
It sells for $34.99.
More information on the why's and how's of converting video for Premiere Elements can be found in my article "Converting Video for Premiere Elements", free from Muvipix.com.
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A free converter that will convert AVCHD to Premiere Elements compatible hi-def MPEG2 is the Free AVCHD Converter, available from:
http://www.koyotesoft.com
According tp Paul Scrivener, you should up the bit rate to 25000kb/s and convert, and it will export 1920x1080 MPEG2.
One downside is that, when you install it, it automatically downloads a search tool to your browser toolbar -- but it can easily be removed using Add/Remove Programs.
For easy editing of AVCHD and even conversion to standard DV-AVI, a great buy is Corel VideoStudio Pro X2. This editor/converter sells for $59.99.
http://www.corel.com/