According to PP3 it can import m2t files. I have a m2ts file from a Sony HDR-X500V Handycam that I want to import. Can anyone tell me what is the difference and what conversion I might need to do to import it? Thanks!

m2t is mpeg2 and m2ts is AVCHD. The latter is not supported by CS3.
Whats in a letter: a whole different ballgame...
You need to convert and there are several options;

Cineform Neoscene (http://www.cineform.com/neoscene/)

NewBlue AVCHD Upshift | Batch convert your AVCHD files into standard .M2T files. (http://www.newbluefx.com/avchd-upshift.html)

Thanks, Ann. I will be upgrading to CS5 shortly and therefore hope to solve this issue. I really appreciate you taking the time to share your knowledge.