I would like to convert my AVCHD m2t files as they will not open in AE. If I convert to any other format will they lose quality?

What is a good program to use? I already have Adobe Media Encoder but unsure if I should use it or is there a better one?

If you have around CS4 or later, try renaming the extension to .m2ts.

If you have an older version of After Effects, MPEG Streamclip is the best way to go for the Mac. Adobe Media Encoder should work for Windows.

One thing to keep in mind is you have to retain your interlacing if the source file is interlaced. If your converted file is interlaced and AE can't figure out field order, force it to interpret "Upper Field First."