I'm using the using the 'AVCHD 1080p30' setting but its asking to keep existing or modify. I select modify and then looking at the interpret fields, Upper is selected, surely it should be progressive?

Try dragging the video file in the project window down to the "new item" icon (looks like a post-it-note, next to the new folder icon). This should create a new sequence with the exact settings of the footage.

As I recall the C100 doesn't produce true progressive as such, it's within an interlaced wrapper.

Here is how you do it.

Adobe Community: Canon C100 AVCHD workflow (http://forums.adobe.com/thread/1103586?tstart=0)

And also this is essential reading to gen up on PsF and CS 5.5.2 workflow.

http://provideocoalition.com/atepper/story/psf8217s_missing_workflow_part_7_adobe_premiere_pro_cs5.5.x/