I posted this on Vimeo, but thought it would be good to post my experience here too.
After much frustration I've think I may have finally found a workable editing solution for windows; Corel's Video Studio Pro X2. There is a 30 day trial available.
My initial throughts when first launching the app was it doesnt perform satisfactorily. After more research and some other positive reviews of this program I gave it another shot.
VCPX2 uses proxy files for editing. I didn't realize this right away, and thats why I previously came to the conclusion the program wasn't up to the task of editing the 5d files. So in a nutshell, you drop your files on the timeline and it will create proxy files automatically. Depending on your pc specs this may take some time. I tested VCPX2 on 2 different pcs with different OS's and specs.
1. Windows XP - 2Ghz Core Duo - Editing 5d files is sluggish even when using proxy files. Surprisingly proxy files created from AVCHD footage is very responsive and plays without stutter. It doesn't make sense, but maybe the files are rendered differently? Summary - IMO editing on this pc is painful but workable.
2. Vista 64 - Quad Core - Proxy file creation is fast! Previewing the timeline is fast! Rendering output is fast! Summary - I'll be milking this 30 day trial. Granted, this is not a professional application, i think this may serve my needs just fine.
Cons - Personally, I'm a fan of Sony Vegas and an even bigger fan of Magic Bullet looks. There is no support for MBL, but there is some filters in there that may do the job. Additionally, the color correction options look weak. Also, I experienced 1 crash in testing. Luckily my test project was intact when re-launching. Another con, was that it did not work with the core duo machine.
Export Options - I havn't quite mastered the export options. It does have a WMV HD export template but has not worked properly for me. Instead it has created low res files that are far from HD. I was able to successfully export HD files in both quicktime .mov files and divx .avi files. I could not export HD .mp4 files.
I'm hoping in the future that I find a working solution for Sony Vegas that does not involve purchasing an expensive (but highly functional) codec like cineform. But for now I'm quite burned out from all these tests, so VSPX2 will be my editor of choice for now.