AVCHD + iMovie, best tactics for home movies

Hey all. Thanks ahead of time for your help. Even after a decent amount of research, I'm having a hard time figuring out some of this.
I have a late-2008 13" MBP (2.4GHz ic2d), iMovie 08, a Canon Vixia HF20. My previous camera (mini-DV tape Panasonic) imported into iMovie a consistent 6.86 MB / second at 29.97 FPS and 853x480. I guess we're spoiled by the small amount of hard drive space this uses up, since we have several years of footage (unedited) on my MBP.
My daughters like to look through the unedited footage in iMovie (as a player), so it has become kind of like iTunes for our video files. Plus, who knows when we'll have the time to do editing - i.e., no time soon, if ever.
So, we're just looking for a way to continue the trend with our new Canon HF 20 camera, a gift from the grandparents. (Yes I hear you laughing knowing what is coming...)
The HD clips are super small on the actual camera, but bloat up once iMovie imports them into AIC. I've read up on this already, so I understand why now. But obviously we don't have the internal HD space to store unedited HD video with huge AIC file sizes.
I tried downloading the VLC program that was suppose to play the MTS files, but it didn't work (probably because I didn't copy over the whole folder tree/stream files from the camera, I'm guessing). Is that my best bet to keeping the file sizes down?
I've been reading up on programs that convert the AVCHD format to MP4 and DV so that iMovie can read them (the conversion process takes forever). I guess I don't understand the benefit of this. If my iMovie already can import them into AIC, why would I need a 3rd party conversion program?
Or more specifically, does using a converter program to take AVCHD to MP4 retain full HD quality but reduce file size? How about to DV format?
I'm not wild about the idea of taking 12x the clip length to convert the AVCHD files into MP4, but if that will be a one-time "suck it up" process, and we'll ultimately have small file sizes (yet full HD quality), I can see the value there.
We're not tied to using iMovie (we don't even edit really, we're just using it as a player/organizer right now). *So I guess our goal is to keep file sizes down so we can (ideally) have all our unedited video on my MBP for view-any-time fun... all the while retaining HD quality if we ever (way in the future) want to edit it.*
Sheessh, it's just home movies. Got so complicated so fast.
I do have an ASUS G73JH (i7-720QM, Win7), and I read AVCHD is native to Win7, but I'd really like to avoid using the PC for the videos.

Thank you so much for responding. But my questions aren't really about archiving the raw AVCHD/MTS format (which I believe I can already do right now using Disk Utility or my PC).
The issue is that we still want to play/view the unedited HD files on the Mac, but need to keep the file sizes down (so AIC format is out of the question). I guess my questions can be summarized as follows:
*1) How can we simply view/play the raw AVCHD files on the Mac, while (a) keeping the file sizes down, and (b) maintaining the HD quality to do some editing in the (very) distant future?*
I tried the VLC Media Player program, but it didn't work (even with the entire folder tree from the camera).
*2) Does converting the AVCHD format into MP4 (or DV) result in a loss of video quality?*
My couple tests doing this (with AVCHD Converter program) took forever to do the conversion to MP4, but ended up with very small file sizes as well as file types that Mac could play. It was hard to tell, but it looked like the video quality went down. I have not tried converting to DV yet.
*3) If you are trying to retain the most video quality while keeping the file size as small as possible, is it better to convert AVCHD format to MP4 or DV?*
*4) Is the conversion from AVCHD to DV/MP4 quicker based on CPU?*
VoltaicHD, for example, says it takes 12 times as long as the original footage to convert the clip, but it didn't mention the CPU. If I did the conversion on my i7 quadcore PC, would it all go faster?

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