ITunes can't edit lossless. When you import any HD stuff it convert it to the Apple Intermediate Codec which is highly compressed.
In the other hand the other application you are using (Wondershare) doesn't seems to have good export options to keep the quality for editing. A "mov" (QT movie) can contains many different codecs, so the quality will depend of the codec in the conversion.
Without QT Pro, neither FCP, you have no many options to convert the MTS files for further processing.
[Kathryn Clayton] "I just downloaded the FCP X trial version, but saw online that there is no backwards compatibility with FCP7. Arrrgg."
Use this and transcode the MTS files to Prores.
You will be able to edit thees files in FCP.7.
rafael
http://www.nagavideo.com