.mts files and compressor settings

Hello,
I need some help using final cut pro!
I recorded some footage on a Canon HG20 camera onto an SD card.
I then transferred the footage with showed up as .mts files from the SD card onto my macbook.
My first question is why can't I open .mts files with imovie or final cut pro?
I used an app called Video Converter to convert my footage into .mp4 files. But I realise that these are compressed files and may not be ideal for editing.
My second question is what is the best file type to edit in final cut pro?
So I imported these .mp4 files into Final Cut Pro 7. The compressor for these media files in the browser is H.264 and I realise that my sequence settings have to match these compressor settings. But I have two problems with this -
1. I want to eventually export the video to YouTube, and editing .mp4 files with a compressor H.264 is going to eventually be poor quality. Right? Can I change my media compressor settings?
2. The most important and puzzling problem is that even though my compressor settings match, everytime I drop something on the timeline or edit anything on the timeline it shows that I have to render it - so basically I'm rendering my footage continuously to see the playback. What am I missing - what am I doing wrong!?
Do I have to do something first in Easy Setup or changel my sequence compressor to Apple Pro Res?
All I want to do is edit something in final cut pro and upload it on to youtube with reasonably good quality - any help with this would be very much appreciated as I've been scowering the internet for answers and nothing seems to solve my problem!
Thank you in advance,
julia19

Hi Russ,
thank you so much I'm doing a log and transfer now and it seems to be working! I think my initial problem was that I was trying to transfer only the .mts files when I should have been transferring everything from the SD card.
I can't believe it was that simple!
Are there any specific settings I have to do in Easy Setup in order to later export to YouTube?
Thank you again!
julia19

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