AVCHD, or Audio and Video Compression for High Definition, is a video format that is designed for camcorder use. It uses a disc structure designed for Blu-ray Disc standard compatibility, and benefits from native support among most Blu-ray players on the market, including the PlayStation 3 (PS3) console. The format is comparable to other handheld video camcorder formats including HDV.
AVCHD is a tapeless high definition recording format. Instead of a tape, 8cm DVD media was chosen to the recording medium for AVCHD content. Blu-ray Disc would have seemed like a more logical choice considering the content that would be recorded into the format, but the DVD format was chosen for reasons of costs. Users being required to use blank Blu-ray media would make the format less affordable and would take away some of its charm when compared to other rival formats.
AVCHD content also can make use of SD and SDHC cards, or even hard disk drives if the recording equipment supports it. AVCHD video is recorded using the MPEG-4 AVC/H.264 compression codec, the same now used with most Blu-ray Disc content. Dolby Digital (AC3) audio or uncompressed PCM audio is supported. Multimedia content is multiplexed together as an MPEG-2 Transport Stream. The format takes on its competitors by adding more features to AVCHD, such as menu support that is DVD-Video reminiscent, subtitles and slide shows.
BDMV disc have a Blu-ray like (but not exactly similar) structure, with a BDMV and a CERTIFICATE folder at its root. Transferring this content to a computer can be achieved by connecting the camcorder itself to the computer via USB or FireWire, or if it is stored on a SD card or DVD disc then they are other options
AVCHD is quickly becoming a format of choice for piracy too. Street pirates have been found selling fake Blu-ray copies that have cases that are almost perfect looking, but on the disc is AVCHD content. What is remarkable is that to most viewers, differentiating between a source Blu-ray Disc copy, and a well-made AVCHD recording, is not an easy task (although it's made easier when premium Blu-ray features are missing).
More information: Convert MKV to AVCHD for PS3 and Blu-ray, Complete Nero Vision 5 AVCHD Authoring Guide, Burn AVCHD with ImgBurn, How to burn AVCHD with Nero Burning ROM, Convert MKV to AVCHD for PS3/Blu-Ray (Easiest Method),