Need Advice For Working With .MTS Files In Vegas

[JamesBirkbeck]

I want to use Vegas Video 11 to edit some clips. The clips were recorded on a Panasonic camcorder and are in AVCHD format, shot in HA1920 mode, and have the extension .MTS.
My computer does not seem to be able to handle the HD video -- when imported into Vegas, the clips play like a slideshow -- so I am assuming I will have to convert them to a different format.
My question is, which format should I ideally choose? There are so many, and I am a bit bewildered. I want to try and keep the quality as high as possible, while also taking my hardware's limitations into consideration.
I am running a Toshiba Satellite laptop with an AMD E-350 1.60 GHZ processor and 4GB RAM. My OS is Windows 7 Professional 64 bit.
Also, after converting the video, what Vegas template would be the best to use?

Thanks in advance for any help.

[Midnight Blue]

To get the video to run smoothly on such a poor computer you would have to convert the video files to a standard definition format like mini DV .avi. Another thing which may help is reducing the preview quality to draft this does not affect the end quality of the video, just the preview while working on it in Vegas.

[Z Cheema]

They should be fine on a good quad core,

try making proxies and then conform the project with the high res ones