I can't believe NO ONE has taken me up on this offer... someone please help!
That is whacked out.
What model Sony camera?
I haven't bumped up to CS4 yet, so I can't help in that regard. It might help others if you would mention what model Sony you're using and what format you're shooting in.
The stills had some flicker but overall looked pretty good compared to the jittery video. One thing I noticed was that the audio sounded as though it hadn't dithered correctly. It has that high pitched squeal that you get from bringing 16/48 audio into Windows Movie Maker which only handles 16/44.1 although I may be incorrect about that now since they have a newer version of WMM which I haven't used.
Have you tried capturing with other software?
Ooh boy, there's your problem....
You aren't going to like what I have to say, but keep in mind that I do believe things will get better in the future. Your cam records with the AVCHD codec. Now I really do see this as the codec of the future; however, right now no editing apps work well with it on a PC, and I do mean NO editing apps including Premiere. CS4 is Adobe's first attempt to edit AVCHD and nobody is having luck with it. To top it off, your cam also records 5.1 surround audio. That's also likely to be a caveate when trying to use CS4.
What most guys are doing is transcoding to another codec before editing. Unfortunately, it will cost you a bit of money to do so. Here's one converter software you can try, although I don't think it can handle surround sound or even AC3 stereo, so I'm guessing it either won't read the audio or it will change it to another stereo format:
If I were you I would put up another question in this forum asking for reccomendations for transcoding software for the AVCHD codec with 5.1surround sound. There must be somebody else in this forum who has already been doing this for a while that can assist you better than myself. I can tell you that Final Cut Pro seems to edit this format really well for most people, but of course you have to be using a MAC for that.