FCP Studio 5.1.2 and MP4 video

Before I pull out any more hairs (maybe that should be "singular" as I don't have any to spare)......
I have some wonderful MP4 (mpeg4) video (about 10 minutes) that I want to edit in FCP:
854x480
29.97fps
AAC audio 48kHz
H.264 decoder
Data rate 3047.12 kbits/sec
(This is the info QT gave me about the clips). I've searched the forums, but have not found anything this specific about editing with MP4 clips. If I missed it, please kindly direct me there.

Is there a sequence setting in FCP that will accept these clips and not require rendering?
If I import the MP4 clips and put them on the timeline, the resolution is terrific, but I have to render every clip and it seems to take a very long time. Or, am I doomed to rendering with this format?

I can convert to DV format and use the DV NTSC 48kHz Anamorphic setting and I don't need to render, but it appears that I lose the pristine resolution of the mp4 clips. Admittedly, it is still quite good.

My intended output is to a QuickTime movie format for exclusive use on a computer and distribution on CD and it may be that converting the MP4 clips to DV would still produce a viable QuickTime output. I have not got to that part yet (the fun just never stops!). Thanks for any help.

Regards, Cyrus
iMac 27" Intel i7 Quad-Core; 16GB RAM; 2TB HD
Final Cut Studio, FCP X, Photoshop CS5, After Effects, etc.

You can't edit MP4 any more than you can directly edit most MPEG2 files. Most of the time, the stream isn't video. It's management data. In the case of MP4, what's there doesn't even have to be in the right order.

The shock is what you have to convert to to maintain the quality. MP4 is an insanely aggressive compressor. I would be converting the work to one of the uncompressed codecs--8-bit, Animation, or PhotoJPEG with the quality slider all the way up. I'd be doing this directly in QuickTime 7 Pro, not Final Cut.

Then edit your brains out.

You will be shocked at how big the video really is. I know that's why you want to leave it in MP4 format.

Koz