For DVD, it is SD all the way.
I do not know your converter, but it should work. Also, many cameras can down-rez to SD, when Captured. However, I doubt that your camera will allow this directly, as it is recording to flash media, and not to mini DV tape. Still, the camera might have an option for outputting to SD. The manual should cover this, if it is possible.
As for the AVCHD vs MJPEG, if your computer is stout enough, CPU especially, the AVCHD might be the better. Much will depend on the MJPEG CODEC that you have installed. Two very popular ones are Morgan, and MainConcept.
You might want to shoot test footage with each format/CODEC and judge the workflow and the quality.
Motion Jpeg is much easier to handle than avchd. Just install the MJepg codec.
Premiere can handle different formats on the timeline
Your output is going to be dvd i assume so make the timelne dv pal/ntsc widescreen and export to mpeg2-dvd or DL to Encore.
Thanks very much for your helpful replies.
I've done some testing - Ann is quite right that no conversion is required - just place the hd motion jpeg clips on the timeline and the media encoder does the rest when it renders the output. The encoding is much slower for the hd clips, presumably because it is resizing and adjusting frame rates, but it seems to work absolutely fine.
Thank you very much
Good news, and thanks for reporting.