Lately I've been using AVHDC (Advanced Video Coding High Definition) .MTS video files on OSX a bit. This video format is not greatly supported on OSX at this point in time. This HD format was developed by SONY and Panasonic and is considered to by a high quality format. My video files are coming from a Panasonic Lumix DMC-TZ10.
Playback
OSX does not currently natively support playback of these files. I recommend installing VLC http://www.videolan.org/vlc/index.html which is both free and has a large enthusiastic usage community.
Conversion
If you want to use these files in iMovie then you have to import them directly from the camera. This can be both slow and reduce the video quality.
If you are not wanting to use iMovie and just want to convert to MPEG-2, DivX, H.264, etc. then you will probably have noticed most search results end up pointing to an expensive piece of conversion software with a heavily crippled trial version.
VLC (see above) does include conversion/export functionality, but its results are a bit unpredictable and is best suited to stream capture.
The best option I have discovered which is fast, reliable and free is Handbrake http://handbrake.fr/ This application is commonly used by some to rip DVD content to a playable file, but it has a great video transcoder at it's core and really does a great job converting .MTS files on OSX for free :)
