I would just try the basic settings for a first time experiment. Depending on what you want as output of course…hit Transcode to change output resolution, and adjust the Quality setting, it seems to be on a very high quality 1 pass encode as default. Once you have the files loaded in the program you can hit Fit All to select the size of disk you are burning to.
You can spend a fair amount of time working with the menu creation. It isn’t the most straightforward gui I’ve seen for that.
Click start and the program will give you a list of possible outputs. I’d try a strict AVCHD output as a first attempt.
The main reason I’d use this program is to make high definition AVCHD files on regular dvd media. [B]If your original files are not high def resolution to begin with, you should simply make dvd video out of them[/B]. There are much easier programs available for that, like DVDFlick or AVStoDVD.