I'm not an expert but here is my feedback on HG10/AVCHD :
The quality of the converted files is great.
But be aware that AVCHD has its weaknesses and it is not only related to file processing.
Some people say they don't see any artifacts with their AVCHD camcorder (SD5, ...).
On 42" plasma, I can say I see problems with movements, complex scenes, fast moving subjects, ... I don't think it is related to the HG10 but to the AVCHD format.
But I can't compare to HDV, maybe it is normal with a consumer HD camcorder (even HDV).
I was about to buy the SD5 but found a very good review of the HG10 (camcorderinfo) now confirmed by their 2007 Awards.
Maybe the SD5 is a better camcorder, but I don't think so (they are both good AVCHD camcorders).
Another problem : playback on TV. I can play the unedited AVCHD files on my PS3, but how can you play your HD movies if you don't have one or a compatible HD-DVD/BR player ?
I'm not saying the HG10 is a bad choice, but be sure to read a lot of reviews and user comments in the forum about AVCHD, HG10 (and the other models) before making your choice.
Regards.