Is editing HD (.mts files) on a laptop possible?

Hi folks,
I have recently purchased a CANON Vixia HF20 camcorder with an internal harddrive that outputs ".mts" files.
I own a DELL Inspiron 1525.
My processor is an: Intel(R) Pentium(R) Dual CPU T3400 @2.16GHz  2.17GHz
Memory (RAM):  3.00Gb
System type:  32-bit operating system
Windows Vista Home Premium
I've used Adobe Premiere Pro in the past (non-HD files not on this computer) and enjoy it thouroughly.
I was hoping to use it again, but the specifications seem to suggest my processor speed is too slow.
I'm looking for some advice:
1)  Will CS4 operate on this computer?  And if so, would I be able to edit the .mts files?
2)  Is there anything I can do to this laptop (upgrades/hardware purchases) that I can do that would enable me to edit these files?
3)  If this isn't going to work, do you know of other editing software that I could use to edit .mts files on this computer?  (I'm reluctant to purchase a desktop after recently buying this computer).
Your insights would be most appreciated.  My thanks in advance.
Kind regards,
Kyle

Hi Bill,
Thanks so much for your great suggestions.  I am a bit confused about your hard drive suggestion:  Is "A 3x I/O w/ SATA connections and 7200 RPM speed" an internal or external drive?  I bought the laptop with an eSATA external drive connection.  If I hook up an external 7200 rpm eSATA hdd, could I expect better performance?  Should I copy the avchd files to it for editing?  Where would you write the preview and other temp files, and does it matter?  do I have control over that?  Other page and virtual memory assignments?
Finally, if I pre-process the AVCHD files through Adobe Media Encoder and convert them to some other HD format first, will I have better luck editing?  Which formats -- of those  available in Premiere/Encoder -- would you recommend?  I know transcoding is an extra step, but that might be the price of remote editing with the laptop.
Thanks again,
Lance

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