AVCHD to DVD for use in PS3

[J-Dub]

Newb here...

I have a Sony HDR-XR500V camcorder and I am looking to take the HD videos I have and burn them onto a standard DVD (still in HD). I already have a DVD burner and since DVDs are cheap, that seems like a good way to go. From my searching it seems that this can be done but the lower capacity DVDs just won't support 2 hour long movies, that is fine for me. I want to create short HD home movies that I can be viewed on a PS3. I have found that the PS3 will support AVCHD, which is what my camera creates, so here is my question. If I want to do any editing of the AVCHD files I believe I will have to buy a software package (like Vegas or one of many others available) to edit the AVCHD files before burning them to the DVD? Of course it would be nice to also have the ability to create a menu, this probably also requires the additional software package?

Appreciate the help.

JW