Editing AVCHD on older XP host?
Remember every time a video is transcoded or rendered you will loose some quality. Why not consider getting Vegas Movie Studio. Version 9 through the current version 11 are compatible with WinXP and can handle the AVCHD format just fine.

Vegas Movie Studio is the light or home version of Vegas Pro and costs about 84% less.

If you are only editing simple scene to scene, not multitracking video as in compositing, and keeping it simple, any of these versions should work on your WinXP machine. The older the version the cheaper the cost, for instance Vegas Movie Studio 11 (current verison) is running about $94 while the older version 9 maybe as little as $75 on amazon.com or less on EBay. This way you can edit your original AVCHD files and only have to render once.

I ran Vegas Movie Studio 9 before upgrading to the pro version and found it perfect for simple scene to scene edits, and it has a multitrack audio too so can have voice, effects, Foley, ambient, and music all on their own tracks.

If you choose to do this, I would run a test with how long vs how many effects you can get Vegas Movie Studio to do on this older machine so you will know what the limits are. Even with a quad core running 4 GB of DRAM on Win7, I have learned there are limits what I can do with the Pro Version of Vegas 10. This is extremely useful to know as you will be able to walk into a project knowing if your gear can handle it or if you will have to seek workarounds, like breaking a project in half and rendering separately or not.