of course PP (or any other editing program) will ask you where your files are if you moved them from A to B, once the file path changes.
different from Final Cut Pro PP doesn't prompt the file path it just asks for the specific file.
the problem that comes with that -in your case- is that your camera creates a (horribly illogic) file structure that repeats itself starting with 000.MTS and so on.
unless you didn't rename the files it's gonna be difficult/impossible to find the correct path. trying to fix the problem via .xml will just make it worse.
because the (your) avchd codec (wrapped in .MTS) isn't the easiest to decode anyways - i suggest to transcode your files to a codec you could transcode your final film from. batch rename (with adobe bridge e.g.) the output files and make sure your data rate is at least as high as your input (28Mbit in case of your HDC-SD700).
this will work.
besides that, you can read this thread - it explains the .MTS situation very well.
Transcoding everything seems like an un-necessary solution. I too have found the lack of a file path to show which version of a file you're looking for frustrating. As a work around I've found that cancelling the initial useless file relink box, and going through and doing it manually much easier. You can just highlight all the clips in a bin and hit relink, and then at least you know which version of 00001.mts you should be linking to. Another thing that works sometimes is to highlight ALL of you media, but make sure that last clip that you highlight and the one you rightclick on to get the "link media" option has a unique file name. It should ask you for this file first, as long as all the other files are in the same relative file paths as they were previously it should then automatically find all your media. This second work around is great when it works, as it links up all your media in one go, but I've found it a bit hit and miss whether it works. Failing that going through each bin and linking things tape by tape will sort it out.
I also suggest putting in a feature request to have the last known good file path show when it brings up the re-linking function on opening the project. The more people that submit the request the more likely it is to happen, and it seriously needs to happen.
Feature request form:
according to other opinions in different threads NOT to put all media in one folder, i wouldn't necessarily go with this approach. sometimes it's the best you can do. and you can always manage your footage with the editing programm, creating folders and alike.
in some cases you're left with no choice - in AVID e.g. unless you use its AMA (avid media acess) interfaceand sort of soft-link to your media AVID will first transcode and then story everything in one folder by default. it then creates a little index file that tells you right away if something is missing.
personally, if i knew i have multiple folders with the same structure and file names i cannot change (cause it'd disrupt the file structure), i'd definitely put in the initial time to transcode to not to run into obstacles later on.
advantages: better codec, less choppy playback, less rendering, no relink issues
disadvantages: transcoding time, less disk space, probably larger files
sure, nowadays software is designed to avoid just that and all my conversations with PP pros showed me that the basic thought behind PP is to "just slam your footage in and start editing" - but this isn't always the wisest choice. not because the software is not able to handle the codecs - but because you'll run into problems with data structures.
plan your postproduction like you would plan a nice dinner.
chop the onions before the pan is hot.