Do you have Apple's QT Player installed?
If so, what version?
If the file is an MTS, it should be full AVCHD w/ the H.264 CODEC. I do not recall Panasonic doing anything strange with the files, but could be wrong.
I would run one of the files through G-Spot (free, great video file utility), and post a screen-cap of the G-Spot screen, just to rule out any oddities.
Also, when you copy over the files from the SD card, be sure to get the full folder structure, and not just the video files.
If the MTS is AVCHD, then that would be the Project Preset to choose. You will know if it's the perfect choice, if you have no red line above the Clip, when you drag it to the Timeline.
I'm still trying to pluck away at this issue. I did uninstall and reinstall PE, and that seemed to fix the issue with the settings window. (I didn't see John's post until after I did this, so I did not "deactivate.") Now I get this window.
One question I have is about an AVCHD setting. I don't see where I can do this on any of my presets. Anything I've tried so far has yielded the same error message I received before.
I'm also working on this from the other end. I'm gathering that Panasonic has created a complex way of packing its video files. You have to be a hound dog to find your videos in the first place. And I'm lucky that mine play back on Windows Media Player. Some people have no way of seeing their vids, even if they can find them. I messed around a little with g-spot, but I didn't know what to do with it. One person did recommend using PE as a "converter," so . . . . The software that came with the camera seems to be pretty useless as far as I can tell.
Anyway, maybe there's nothing PE4 can do. But just in case, this is a somewhat clearer description of our problem.