What server do you use for DLNA? I just found one that works for my stuff (MKV, for example)... might work for your MTS as-is, using the VLC-based transcoding.
Got it working on my Linux media server, plays movies and vids to my Samsung TV great. Not too bad to configure. Followed up with a 5 minute download/install/configure on a Windows box here. It just works and has a decent web interface (using the "dev" version). I haven't tried the transcoding, but I assume that if VLC Player can handle the format, TVMobili can transcode it for your playback device.
At any rate... nice tut.
Working hard on UberCFW, incorporating NTFS, sub-free NetFlix and Blockbuster, PSN cheat system with built-in swearbot and MAC-spoofing, Adding MKV, RAM and BIK movie support, and Xbox360 emu*.
*not really. Get a life, newbs...
My YouTube channel: http://www.youtube.com/user/BenJeremy