mts is apparently some wrapper for mpeg4 material
I found this Video about converting/editing those clips.
Hope that helps you along a bit
It never fails to amaze me how many of those trashy $30.00 programs emerge with every new format. If I ever get into a situation to use .mts I know now that my TMPGEnc Express 4 can handle it (just like it hanldles the Vista/W7 tv record formats)