If you want both easy and free, and you want to work on a Mac, I would stay with iMovie, but use MPEGStreamclip to export your MP4 file to a Quick Time as a preliminary step. Final Cut Pro X will work with most MP4, but works more reliably if first converted to mov. (However, if you're not crazy about like iMovie, you will probably not like FCP either.)
Premier Pro would probably edit your files natively, but it is a fairly pricey option. If you're interested, go to the Adobe web site and download a trial version to test how you like it and how well it will work with your camera.
Thanks Russ! This works... I have Quicktime Pro and it now plays the MTS file with this plugin installed... a little jittery but probably more to do with the spec of my machine. I have also tried it in MPEG Streamclip and it does give an error message but when I click Continue Anyway it plays (again a little jittery)...
And finally, it now also imports the MTS file into iMovie for editing!