Okay here is the puzzle. I have Camtasia Studio 7 now installed on 3 separate machines. 2 are Windows 7 Ultimate and one a Windows Vista for Business ( all are up to date.) latest versions of all applications. Camtasia is one of the best editing tools out on the market for editing video next to say Adobe Elements. It is very simple and works well. It is currently working with other formats. It is supposed to work with mpg and many others see images below.
The files are being converted from a .ts file to an .mpg file format within the Hauppauge WinTV7. (also latest version)It is a tool that allows you to record from a TV card.
When I open the mpg files I can view them in the WinTV7 app and in WINDOWS MEDIA PLAYER AND VLC MEDIA PLAYER with no problems.
I have downloaded and installed the tools from codec guide
None of which worked to resolve the problem on any of the machines or any of the newly "fresh installs of Camtasia Studio 7.
I then went and tried again to do a simple import media into Camtasia Studio 7. I get the same consistent error seen above.