Encoding Project to HD Quality

Hello all,
We are a small high school in Massachusetts in deep with HD Video...with shallow knowledge of Premiere CS4/Encoding/etc.
We are shooting great quality AVHCD video with the new Panasonic HMC-40 Camcorder.(football/basketball games)
We have encoded the .mts files using the Canopus encoding software that came bundled with the camcorder(Edius Neo)
The quality of the .avi (1440 x 1080) is beautiful....burn on a DVD and it is still stunning on a 54" Flatscreen.
We have taken the .avi over to Premiere to put in a title and to edit out some dead spots.  We want to stay with Adobe products to further enhance the output.
Problem;
When we encode the edited video there is a dramatic dropoff in quality. (mpg2---1440 x 1080)
What we have attempted:
Drop the .mts files into Premiere-We don't have enough CPU to handle even the basic edit......at the same time Premiere handles the HD quality .avi's from the Canopus encoder
Ran thru every preset in the Adobe Media Encoder ....did not get close to the same results as the original .avi.
Help!...is there a method of encoding in CS 4 to get HD quality results to a DVD?
Thanks

There's a link to my tutorial in this thread.

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