For well over a year now I have a Canon HG10 HDD videocamera and have been shooting HD-videos in XP and HXP mode (9Mbps resp. 15Mbps) [1440x1080i]. It outputs .m2ts-video files (which is a format like the .raw-format for photos and it is used by e.g. Canon, Sony and Panasonic), a format like that used for BluRay. The package contained i.a. (Corel) Intervideo WinDVD SE, which can play this raw format and (Corel) Ulead DVD MovieFactory SE to edit and author the movies and create a DVD or AVCHD. MovieFactory can, however, also "export selected fragments" in the more common .mpg format.
I've on occasion (on another PC) also used (the free version of)
Any Video Converter to convert m2ts to (DVD) mpg. I've (at that time) also found other free programs like e.g.
Super which can do this conversion too and I'm sure you can find them as well!
P.S.: From a test (in Dutch) of 7 commercial AVCHD converters I understand the best paid converters are (in this order) Elecard Converter Studio AVC HD Edition, AVCHD Upshift, Voltaic HD and AVS Video Converter (v. 6.2 in the test).