[Ann Bens]

The 1.22 aspect ratio is somewhat awkward
Try this:
video settings 702×576 (uncheck select to maintain frame aspect ratio while resizing)
crop in the exportsettings 25 pixels from top and bottom.
Set it to widescreen.

[Ann Bens]

mpeg in PAL is 720×576 you cannot change that.

[Ann Bens]

Select clip B and drag it to the beginning of clip A while holding shift+Alt.

Alex: please do not use short urls. One has no idea where one is directed to. I certainly will not use/click on them.

[Ann Bens]

Your cheap pocket camera does not do avchd that would be mp4 or mov.
AVCHD is very specific.

[Ann Bens]

Depends on what your output is going to be: dvd, bluray, web, mediaplayer or ??? and which version of Premiere.

[Ann Bens]

I have the Mainconcept codec installed and it works perfectly in CS5.
Make sure its 64 bits.

[Ann Bens]

Premiere does not do Smart Rendering but the Mainconcept plugin for CS5 called MPEG Pro™ HD 4.1.1 or the Codec Suite 5.1 does.
https://www.mainconcept.com/products/apps-plug-ins/plug-ins-for-adobe/codec-suite.html
https://www.mainconcept.com/products/apps-plug-ins/plug-ins-for-adobe/mpeg-pro-hd-cs-4.html

[Ann Bens]

Make sure you have the latest update installed: 5.0.3.

[Ann Bens]

Upload YT again, you should have a 1080p setting instead of just 720p.

[Ann Bens]

If there is a yellow over the footage you can force render by hitting Render Entire Work Area in the pulldown menu Sequence.
If its a red line hit Enter.
If there is no coloured line lower the playback resolution.
Try to put your project in a non-Matrox project and see if you have the same issue.