Update: June 16th, 2012. For Windows, you could use Windows Live Movie Maker to edit the video and save it to whatever your system supports. Painless, but time consuming.

MTS is a high definition video file format and converting it seems such a big deal. It might be. However, I managed to convert one such file using only free sotware. Interested? Read more.

There is a number of steps to be taken when converting such files. This is what I did:

1. I installed x264 codec.
2. Reboot.
3. I installed RipBot264v1.13.3.
4. Reboot.
5. I installed the software required by RipBot264v1.13.3, from top to bottom: AviSynth, FFDshow and Haali Media Spliter.
6. I hacked the RipBot264.ini file located in the program folder, the line:

   CheckRequiredSoftware=1

   to:

   CheckRequiredSoftware=0

   I had to do this because RipBot264 kept saying that FFDShow is not installed when, in fact, it was.

7. Reboot.
8. Then I started to convert the video which took about 5 minutes for a 21 seconds video on an AMD 64×2 4000+, 4GB RAM DDR2 800MHz, ATI Radeon 3650 (512MB, AGP 8X), SATA HDD, Windows XP SP3. Because I didn’t unselect the „low priority” checkbox! If you have a decent system make sure you unselect the checkbox. The output file was an 1920 x 1080 pixels  .MP4.
9. I tested the video with Apple QuickTime (very slow playback of the 1920 x 1080 pixels video on a 1024 x 768 display, didn’t resize to fit the screen) and Windows Media Player (normal playback, full screen, resized).

I hope you’ll find this information useful.