Q: Sequence settings.

You'll need to convert the H.264 files to AIC prior to importing them into FCE.  FCE only works with DV and AIC codecs natively.

-DH

Convert your H.264 recordings to QuickTime/Apple Intermediate Codec.  Easiest way is to use MPEG Streamclip, which is free and works great.  If your original video is 1920x1080 be sure to select that frame size in MPEG Streamclip; and be sure to select Apple Intermediate Codec as the compression type.  If for some reason MPEG Streamclip doesn't work in your case, look into Clipwrap.

In FCE, select the AVCHD Apple Intermediate Codec 1920x1080i60 Easy Setup, then create a new sequence, then import your converted clips and place them as you wish in the newly created sequence.