And if you look here, you'll see even state-of-the-art machines are choking on the footage. Supposedly Vegas handles it more smoothly than Premiere CS4.
I think most of us just bite the bullet and transcode to another format like DVCPro HD. That will cut pretty nicely on most modern programs/most modern computers.
I've been transcoding to DVCProHD (I'm on CS4). Cineform ProspectHD v4 is supposed to be out this week, so I'll probably pick that up before too long and edit in that format.
I also transcode to cineform files (via Neo Scene)- they are much more robust for post work and are visually identical to the original. Or, if you use Vegas Pro, you can use Gearshift. This allows you to edit the files through an SD intermediate, then render your final project from the original AVCHD clips: