Well, I have given up on native AVCHD until Adobe fix their broken software.
Currently I have bought TMPGEnc XPress to do the conversion to whatever format I feel like and it workes fantastically. Yesterday I was actually able to put together a 4 minute clip with no crashes or lockups at all.
I, too, have given up on native AVCHD in the current 4.0.1 version of CS4... you just need the free conversion program from Panasonic to convert the AVCHD to the P2 format (DVCPro HD) and you should be fine. I used to have 4 gigs of ram (now 8) with XP 32 bit, and I was able to use over 3 gigs of it, so upgrading to 4 gigs is a good idea. 3 is better than 2! But you should also think about getting Vista 64. It works great, is very stable, and Adobe recommends it for CS4 users-along with a minimum of 8 gigs of ram.