PE11 create video using MTS files - best conversion?

Hi,
I have been using iMovie 11 for a couple of years now but have noticed lately that the quality of my new video camera footage has become very grainy and a major loss of quality compared to the original MTS files i have - especially when someone is wearing black you can see how grainy the video becomes.
My video camera is a panasonic sd-80 which creates MTS files.
I have decided to give PE11 a go and my question is - what is the best video output for me to create without loss of quality?
I am using a Dell XPS8500, 8GB Ram, 3rd Gen i5. 
The final file would be used to watch on a pc or stream on PS3.
Thanks,

Probably the best output for your PS3 would be a BluRay disc -- although you can only burn a BluRay if you've got a BluRay disc burner on your computer. You could, however, burn BluRay files to a DVD for your PS3 if your video is under 20 minutes long by using Publish & Share/Disc/AVCHD with the 4.7 gig preset.
For viewing on your computer, I'd recommend you use Publish & Share/Computer/AVCHD with the YouTube HD preset. This will produce an MP4 that should be virtually identical to your original video in quality.

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