You still needs to run the file through Gspot to see which audio codec.
Xvid, Divx etc are not good avi’s to edit, just as compressed and not supported by Pro.
Footage from a Flip is heavily compressed. I do not remember Pro 1.5 supporting mp4.
Run your file through Gspot and see which codec is needed for the audio. https://www.headbands.com/gspot/
Download the trialversion of Neoscene and see of its any good. I love it.
Not everybody has a smooth edit with AVCHD with CS5. It also depends on the machine you are running on.
The bars appear aswel in widescreen setting as in square pixel.
Good tip about the 16×9, I tried to crop manually in the export settings, did not work.