You can work with the 5D footage natively in Premiere, if your hardware can keep up with the big demand on the CPU. I am on a MacPro 8 Core system, and I have no trouble playing back the H.264 from the 5D in full resolution on CS6. When I worked in CS5.5, I did have to transcode to ProRes first, since CS5.5 on the Mac did not play H.264 very well. Create a matched sequence by dropping a 5D clip on the "New Sequence" icon.
If you are on a slower machine, try reducing the playback resolution to get real-time playback, although that doesn't always work well with the high CPU intense material such as H.264. If all else fails, go back to your original workflow and transcode to ProRes and you will have no problem.
Thanks! I didn't know if I was missing a step. Seemed really slow with play back and I'm not use to the option to reduce the res for playback. Our hunger for high quality files seems to be greater than our need to be able to edit quickly. I'm editing on a macbook pro that seems to be slowing down a bit also.
Which version of Premiere are you running?