Gotcha...that's fine with me too. I'm actually doing some testing on my MBP based on everyone's comments in iMovie, and so far it handles my AVCHD video from my HMC40 and TM700K way better than Adobe Premiere does. The video so far plays smoothly,
That is because iMovie transcodes the AVCHD footage into another format and uses another codec (.mov with AIC), therefore the files get bigger (up to 42 to 49 GB/h -
http://support.apple.com/kb/HT2704) and the CPU gets used less.
and the only problem I'm having is going back to a simpler editing program to do my edits and save myself the $3K or pay the $3K and continue to edit in Premiere.
Premiere costs 800 USD, the Production Premium costs 1700 USD. But I think you mean the Mac Pro with 3K.
The MP will be faster in decoding AVCH footage, but it will be still a pain in the arse.
I'm wondering if I should just spring for a SSD for my MBP? It sounds like that may be the problem based on your response, not the other hardware in my laptop.
An SSD will not speed up using AVCHD footage natively, as it has a low data rate (file size / length in seconds >>> KB or MB or GB per second) of less than 5MB/s, even a slow HDD can play that. The hard work is done in the CPU to properly decode the frames, as editing applications need every frame and MPEG-4 (used for AVCHD footage) does not store every frame but interpolates between two stored frames.
If you use the Apple Intermediate Codec (AIC) and have 49GB/h files, the data rate is less than 15MB/s, even a slow HDD will be able to play that.
Btw, it is not recommended to use the same HDD (internal HDD in your case) for storing and using media files (your footage) as the OS is installed on. Use a dedicated FW800 HDD for storing your footage, be it AVCHD or AIC or ProRes or whatever format Premiere supports.
I searched a bit and found a solution, which you seem to have found too, but didn't realise the potential.
http://kb2.adobe.com/cps/403/kb403297.html
In other words, use iMovie to import the footage from your camera (highest settings you can get - IMPORT 1080i video as FULL - like screenshot below, ignore the red circle).
Then import the properly transcoded files in Premiere and off you go.