Answer -> The original MTS. Anything else will not contain the original bits.
2. As to creating Video DVDs, I'd hit google with DVDFLICK MTS SUPPORT and see if folk have discussed that.
I have a new (my first) camcorder (Panasonic).
It records in AVCHD (*.MTS) format.
I have both DVD Flick and Windows (7) DVD Maker that I can use to create normal (not Blue-Ray) DVD's for my 80 year old mother-in-law.
(We sent her a portable DVD player for Christmas with 100-240 Voltage and a British 220 V plug adapter (she's in England) to keep it simple for her.
However, neither program reAognizes the AVCHD (*,MTS) format.
I do have CUDA Video Converter Advanced Registered version which recognizes the AVCHD (*.MTS) format files copied over from the Panasonic CamCorder.
However, which is the BEST format to convert the AVCHD (*.MTS) format to (and store) so I can use either DVD Flick or Windows (7) DVD Maker to make DVD's for her.