When using Time of Day (Clock) time the time code should be Drop Frame.
If you jog through a recording in Quicktime (after .mov conversion) you'll see it IS Drop Frame. In Final Cut Pro it will jog as Non Drop Frame. Both Quicktime and Final Cut Pro report it as Non Drop Frame.

Work flow - Sony Transfer Tool 2.1 in Final Cut Pro 6.0.2.

Open the .mov file in QuickTime and use the timer display on the left and pull down. It'll show the time code as Non Drop Frame.

In FCP drop the clip from Browser to Viewer.
Go to upper right time code display and right click.
It'll report the time code as Non Drop Frame.

In Quicktime if you jog through the numbers you'll see it's Drop Frame (:29, :02) even though it reports Non Drop Frame.

In FCP it will jog as Non Drop Frame (:29, :00, :01, :02)

I'm not sure if Windows users are seeing the same but you might want to check. Again time code is Drop Frame as it should be but at least on Mac, the flag that Quicktime and FCP see shows Non Drop Frame.

I stopped using Time of Day on the first day I got the camera because the files did not import. Perhaps it had something to do with this?

It sounds like at least you were able to get the clips to import.

http://dvinfo.net/conf/showthread.php?t=108983

Interesting Eric,

It seems our setups are similar. I wonder why mine import and yours don't.

I'm shooting 30p though and I think you're shooting 24p.

It may well be there's a time code flagging bug but the impact may be different depending on the 24p vs 30p. I wonder about 60i but I generally don't want to shoot interlace.

It's possible this isn't more widely reported because people aren't noticing . . . well they may not notice in 30p but they sure would notice if they can't import in 24p.