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Your camera is AVCHD. Version 4 and below of PE don't support that format, but Version 7 when it comes out will support it (we hope well!). In the meantime you could try converting it to HDV format with a third party utility.
As stated by Peter use AVCHD Upshift from VASST or upgrade to PE7.
Also you need to set up your hard drives properly.
The best way is to have 2 seperate hard drives. One small one for the OS and all your other programms and another large one for all your work. Hard drives are never to be partitioned. This slows down the workflow.
Yes, you are right, Peter, the camera is AVCHD format and I guess that's my 'problem'. I'll need to get the PE Version 7 for sure. I just hope it comes out soon!! Thanks for your imput.