just purchased the fs5, (in the post!) having FCP 7 will this edit native ok or is there a work around
thanks

FCP 7 can't edit native .mxf file. you need to transcode to .mov
Better switch app, may be FCP X or Adobe Premiere.

Actually, FCP7 can edit some MXF files such as XDCAM MPEG. What it cannot edit is the newer XAVC codecs.

It is long past time to abandon FCP7. Instead of transcoding you should upgrade to FCPX, Premiere, or Resolve. Resolve is free.