I have been using PE4 for 4 years without a problem,but, according to the Adobe manual, MTS files are not a supported video format, H.264 mov 1920 x 1080 HD (Check out page 16 of the ADOBE PREMIERE ELEMENTS 4 manual ) out of a Canon 5D Mark II and AVCHD are, maybe. I suggest you try to get media from My Picture Files Folder which is where it should end up. If it accepts the clips, open up on the timeline and hope for the best. Failing all that use Canon's ZOOM Browser and see what happens.
Ps. I still use a Canon HV20 tape based and used the firewire like you to capture and the video which is High Definition, but, these new hard drive cameras use a different codec and your Canon Manual probably tells you it will automatically save to MY PICTURES, if so access the clips from PE 4 by going to Import Files.
If you manage to open the files at 1920 x 1080i you should not lose quality if you need to Transcode to say Microsoft avi/Uncompressed,(RENDER before you do it) you can do that by Exporting the timeline to Export to Movie and reintroduce the file clips to edit. I might add that the newer codecs might need a Quad Core to handle the complexities of AVCHD and/or H.264 mov, MTS is a mystery to me, you could check with Canon Technical Services , Adobe may not give you support on PE 4 as it is 4 years old. I have serious doubts about Premiere Elements 9, as i found it was not as good as PE4 on trial, which you could download free for a trial ?
Using the USB 2 cable is the way to go, try Movie Maker at a pinch , but, it probably cannot handle HD, only SD Widescreen 16:9. Also, using a generic encoder is a very slow way to go, try to stay with ADOBE .
Message was edited by: Bob Dix Photographer
I agree with Bob. You're not going to successfully work with that AVCHD footage in version 4 of Premiere Elements.
If you're going to edit that type of video in the future, it could well be worth upgrading the version 9, which handles that video format much more effectively.
It also includes a feature called the Video Importer, which will import video from your camcorder to your computer over a USB connection.