Does this issue of decoding MTS files happen in CS5.5 also, or is it just CS4 and CS5?
To be clear, there are two issues;
1. Premiere and After Effects CS5 mis-interpret AVCHD footage as interlaced. That is easily fixed with the Clip - Modify command which allows you to set the clip to progressive rather than interlaced. We are not discussing this problem. This problem is fixed in CS5.5.
2. The problem as I have experienced it is strictly in AE, not Premiere. Once item 1 is taken care of, Premiere has no issues. However, AE still has issues as seen in previous posts. The footage appears to be interlaced, with heavy aliasing on the edges. But the odd thing is that not everyone is experiencing the problem. Same camera, same software, different results. I think we are talking about CS5 only.