Well, I bit the bullet and bought the Sony HDR-CX550V and have been editing the resulting MTS files. Certainly a bit of a PITA on my 1.6 GHz dual core laptop, but better on my 3.2 GHz quad core desktop. For some of the video, converting it to MPEG-2 resulted in reasonably good footage to edit.
I've used Sony Vegas Movie Studio Platinum on both computers to do the editing. When the converted MPEG-2 files are sufficient, I can use them in Premiere Elements to create DVDs. No Blue-Ray yet... but it looms on the horizon!