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It can, but you need a really fast computer to have any joy at it, if you want to edit it natively.
Thanks for the info Curt. I have a dual processor which runs at 2.4 GHz so I will have to see if it can cope with the workload.
I was thinking of purchasing Premiere CS4 so I downloaded the trial version. I found out that the trial version doesn't work with AVCHD files. No way to test. You need to purchase the software first.
One good thing is that Adobe has a 30 day money back deal so if it doesn't work you can get your hard earned cash back.
I have a 3gb 2.4mhz Q6600 quad, XP sp3 and it struggles (at least my opinion) in handling the AVCHD video from my Sony) in the Rendering stage. The quad processors run at 100% (virus detection off, etc.). Seem to take forever. It's overlocked to 3.0mhz. I've gotten a lot of freezes and a few blue screens but that may be to the overclocking.
Outputting to AME for encoding also slow - but since I read about finding the 'use rendered files' switch,it's at least manageable.
I find myself walking away from my computer a whole lot now and coming back hoping it's not abended.