I'm still struggling with rendering a series of MTS files. The comp has only them lined up in a sequence, no effects, no nothing. I changed the resolution to a smaller one and then attempted to render it as a lossless/uncompressed AVI. What happens is that at some point in the middle the rendering quits with a status message: Failed at <time code>, and the error file has no info about it. If I go to that time code on the time line and attempt to go frame up or down, it shows a message that AE can't render that frame.
Is there any way to set up the renderer so that it simply skips a bad frame and doesn't stop rendering there?
No. "Skipping" frames would require them to be trimmed away, so AE doesn't even try to access them. Sometimes also time-remapping without frameblending works by letting it duplicate the previous frame on that particular position. Still, neither of the two might solve your issue, since with any compressed format multiple frames need to be accessed to reconstruct the current one. You see the paradox, do you? I really recommend you try one of the various MPEG transcoding tools or dedicated AVCHD conforming tools like New Blue FX' AVCHD UpShift. All you need is a working H.264, MPEG-4 or MPEG-2 HD file and those tools can help you get that. For future work, you may simply consider setting your camera configuration to always close GOPs, work with fixed intervals and add additional indexing info to avoid loose threads in your stream that make AE go *poof*.