This registry file for thumbnails
http://gidon.reid.googlepages.com/AVCHDthumbnails.reg
Windows Registry Editor Version 5.00
[HKEY_CLASSES_ROOT\.mts\ShellEx\{BB2E617C-0920-11D1-9A0B-00C04FC2D6C1}]@="{c5a40261-cd64-4ccf-84cb-c394da41d590}"
[HKEY_CLASSES_ROOT\.m2t\ShellEx\{BB2E617C-0920-11D1-9A0B-00C04FC2D6C1}]@="{c5a40261-cd64-4ccf-84cb-c394da41d590}"
[HKEY_CLASSES_ROOT\.m2ts\ShellEx\{BB2E617C-0920-11D1-9A0B-00C04FC2D6C1}]@="{c5a40261-cd64-4ccf-84cb-c394da41d590}"
Doesn't seem to work straight away, even after a reboot. But on importing from camcorder began to work!
Can force it to start working by deleting thumbnail cache.
In Vista run disk cleanup (type "cleanup" from start). Select "thumbnails" and delete.