Can you tell us exactly which model your digital camcorder is?
The recording function in MEP is, to my knowledge, limited to analog video and DV tape video. If you have a newer camcorder which stores its files on SD card or an internal hard disk, then you must import those files directly into your project (after copying them to your computer's HDD). (Did you try that when you said "I try to drag video files into a track"?) If you did it that way and it won't take the files... what exactly does it say, format not supported? Or does nothing happen at all? If so, can you import other video files? I can imagine that MEP14 won't take m2ts or mts files because they're relatively new. And also, editing video in Full HD with that version doesn't work very well, you might need to upgrade to v18.
I am able to transfer the files onto my computer using the Sony PMB software that came with the camera. They also appear in "My Pictures" section. The movie clips and the still photos both appear in the Magix media pool. I can drag the jpeg still shots down to the track, but not the video files, which end in .m2ts. There is no message, nothing happens.
When I take mini-movies with my Olympus point & shoot and transfer into "My Pictures", they appear in the media pool and I am able to drag them onto the track. The files end in .avi
When I connect the camcorder with the USB cable and push the "Record" button, I get a message "Could not connect to selected device"
OK, so this camera does record in the AVCHD (h.264) format and in Full HD. Like I said, MEP14 is most likely too old to read these files so you'll have to use a newer version, licensing issues could also play a role why it doesn't support AVCHD. You can download a free trial of version 18 and see there if it works.
If you still want to import it into MEP14, maybe (!) the following tzrick works: Get the freeware YAMB, go to "Create MP4" and drag in your M2TS file and then make an MP4 out of it (it's just re-muxing the file so no quality loss). Then try to import that MP4 into MEP14, maybe it works. Buit even if it does, you'll get problems if your project is longer than ~5 mins because MEP14 won't work very well with Full HD video.
According to the manual MEP14 does not support AVCHD. MEP14+ does; but import only. Both support MP4 but the non plus version requires a paid activation.