H.264 in FCE (from Xacti CG65) question

I recently bought an Xacti CG65 video camera that records to h.264 on memory cards. After copying the footage to my computer, I tried to bring it into FCE. The file will import, or I can drag it into the media browser. However, if I double click it I get a "file not found" error followed by a "out of memory" error.
I was saddened to think I can't edit in FCE. After a few tests, I finally decided to just drag it into the timeline, and it WORKED! The file played back, but unfortunately the audio and video needed to be rendered.
When I looked at the details of the file from with in FCE's media browser it listed that the file7s audio was 32bit floating point. This is what is strange as the Xacti records to 48Khz, 16bit files, and this is confirmed if I open the file in otehr audio programs.
If FCE recognized this audio as 16bit, then the audio wouldn't need to be rendered would it, as 16bit 48Khz is the standard.
Just wondering if anyone can offer any advice. I have read on this forum that h.264 isn't supported in FCE HD, but it is almost working! Any other tips would be appreciated.
Thanks you for your time.

I believe what you're seeing is an artifact resulting from H.264's use of AAC for audio. The 32/48KHz indicator in the H.264/AAC stream probably can't be seen or interpreted by FCE. imho I think you're lucky it works at all, as using H.264 as an input format is not officially supported by FCE. H.264 is a delivery format, not an editing format.
By the way, what are your sequence settings - DV NTSC which is 48KHz by default, or is your sequence DV NTSC 32KHz?

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