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“I’ve tested this theory with MPEG-2, and have been able to make cuts at any frame individually.”
“Sony Vegas Pro can edit AVCHD without a problem if your box is powerful enough.”
All software can edit AVCHD. All software can edit MPEG. There isn’t anything that physically stops you from cutting up video that has been compressed using Long GOP compression. That’s not what it means when you say a codec is “editable”
To say a codec is “editable” means that codec holds it’s quality from beginning to end, and that doesn’t happen when you cut up Long GOP video because you delete frames that other frames look to for data.
Does that mean your video is going to look absolutely horrid when you cut Long GOP video? No. But it’s a fact that codecs like AVCHD and HDV do not perform as well as DVCPro HD and AVC-Intra.