I used the converter that came with the SR7 on the AVCHD files to make them mpg, the quality is about the same as recording in HQ SD, so would I be correct in saying its pointless to shoot in that format if your going to convert it to mpg using sonys application?

I'm assuming your suppose to edit in AVCHD and then render it in a program like Vegas to actually render it with HD formatting kept?

I'll let the pro's correct me on all of this, I'm too new, just learning.

The advantage in shooting in AVCHD is that for the future you will have a HD video. Now you can make a SD DVD, from the AVCHD file, with the Sony Motion Browser software so that you and everyone else can see it on the equipment they have now AND make a AVCHD video to play on PS3 or Blu-ray players. Shoot in AVCHD. That's what I do with my SR7. No need to use anything else other than Motion Browser. Only downside so far is that it plays AVCHD clips individually. I have Vegas 8 and Edius too, these will provide a more sophisticated editing environment but are not really necessary.
Ron Evans