I guess that you have AVCHD camcorder. The .MTS files are, in fact, H.264 video streams encapsulated in a normal MPEG-2 transport stream (MTS = MPEG Transport Stream).

If you need to do editing, there are a few video editors that can currently handle AVCHD files. If you already have a favorite editing or DVD creation program, look to see if they have a version that works on AVCHD files. Using a program you already know is your best bet if you're in a hurry.

Of tools I know that support AVCHD, I recommend Vegas 8 or Vegas Studio Pro 8, both of which should handle AVCHD editing just dandy. See
Sony Creative Software - Vegas video - ACID & Sound Forge audio editing

Another possibility is TMPGenc XPress, which also offers a trial download. Check it out here: TMPGEnc - We Make Digital Video Easy!

And finally, most of the Sony AVCHD camcorders come with a utility from Sony that should at least let you change the encoding to something else. I hear it's buggy, but worth a try, if you haven't already