I've recently purchased a brand new Sony HDR-SR5 which can shoot in both HD and SD. My first problem is that the .m2ts files will import but not open with the 'Picture Motion Browser' software which comes with the camcorder. I can't even preview these files, however I can convert to MPEG but I'm worried about loss of quality.

Basically I was wondering if anyone could help me determine whether this conversion to MPEG is still better than simple SD format. I'm aware the resolution is higher but am not sure whether the quality itself in terms of colour and other aspects are effected.

I'd also like to know if Final Cut Pro can edit directly using these .m2ts formats.

Thanks in advance, any help would be much appreciated.