Unable to play copied AVCHD I have a Flash drive accessory for my camcorder which allows me to record to it as well as the SDHC cards it also uses as media.

This Flash drive can be connected to a computer using a USB connection and is recognised as an external hard drive formatted as FAT32, containing a single AVCHD folder (containing the video).

I have my own external USB Hard Disk, formatted as Mac OS Extended (Journaled, Case Sensitive) and wish to copy my video to that drive for storage, so that I can clear the camera Flash drive for future use with my camera.

I copied the video by dragging it in Finder, however, the new copy will not open in QuickTime; instead a message box "cannot open" appears.

After doing lots of comparisons, I was able to see that the contents of both copies were exactly the same, with the exception that one file: AVCHD/BDMV/INDEX.BDM had changed case (to AVCHD/BDMV/index.bdm).

Upon renaming this file, Finder no longer associated the file with QuickTime, but if I copied the file, so that I had both INDEX.BDM and index.bdm, it worked correctly.

My question is: what is going on here? Why did the case of that file and only that file change during the copy? Why does QuickTime expect it to be one case and Finder another?
The index.bdm file was probably named that way on the original card, but appeared as INDEX.BDM when mounted on the Mac. FAT32 is not case-sensitive, and OS X's file system code (specifically the NSFileManager class) programmatically presents FAT32 contents in uppercase. OS X can open AVCHD content, even with a filename in lowercase, from case-insensitive media, like FAT32 or HFS+ in its default, case-insensitive mode.

However, when you copied the AVCHD content to a case-sensitive filesystem, the true nature of that lowercase filename becomes visible (it doesn't get renamed as lowercase, it simply gets revealed as lowercase to begin with!). OS X / QuickTime get confused by the lowercase name, and you get the dreaded "CANNOT OPEN". 

The fix is to ensure that all the AVCHD-standard files and folders are in uppercase. As you see, the folder tree above the INDEX.BDM files loses its special status, but the INDEX.BDM file can be double-clicked to open the AVCHD browser. Just as importantly, editors like FCP X and FCP 7's Log and Transfer window will properly see the media even on the case-sensitive filesystem.

I encountered the same thing copying AVCHD to a Linux-based NAS with a case-sensitive filesystem. In my case, my Panasonic cameras will write an INDEX.BDM file when I erase all clips or format the card in-camera, but if I erase just one or a few clips, the file gets written as index.bdm. Since Apple's code breaks with mixed-case AVCHD filenames, I'm writing a utility to walk my folder trees and make sure everything is uppercase, grumble grumble...