If your goal is a standard definition DVD, wouldn't it have been easier to find a setting on the camcorder to force it to output to DV (standard def) format instead of HDV or AVCHD?
The latter two require a tremendous amount of computing power (and harddrive bandwidth) to edit. On the other hand, editing DV is easily handled almost any computer. My 1.8ghz notebook has no problems with editing DV. It chokes on HDV.
I haven't been following AVCHD cameras closely, but in another forum frequented by videographers, there hasn't been much discussion about widespread difficulties in editing footage from AVCHD camcorders. I would only guess you're not applying enough CPU power to the task. I doubt iMovie will natively edit AVCHD unless there's been some massive change lately. Final Cut Pro is probably the more competent AVCHD editor on the Mac platform. On the PC, Sony's Vegas Pro (not Vegas Movie Studio) with a dual core CPU should be up to the task. Do some searching through the DV Info forum for enlightenment:
Engadget pointed out a handy device for Sony AVCHD camcorders: