Premier Pro CS5 makes AVCHD footage jagged and bad
Incase anyone comes across the same problem, here's the solution I used.

Once you've imported the footage, right click on the clip, go to 'Modify' then 'Interpret Footage':



A window should pop up. Down the bottom, under 'Field Order' change the setting from 'Upper Field First' to 'Conform to: No Fields (Progressive Scan)'.



Your footage should then adjust to it's original quality.

Upper Field First:



No Fields (Progressive Scan):