We study a single-source single-destination cooperative wireless communication system with multiple relays operating in a modified decode-and-forward mode. Nakagami-m fading with additive white Gaussian noise is assumed for all inter-node channels. The bursty data packet arrival is modeled by a Markov-modulated Poisson process (MMPP). A packet feedback model is proposed to characterize packet loss in the wireless channel. An approximation to the steady state distribution of the proposed generalized discrete time M/G/1-type queue at the source is obtained by state truncation. Packet level performance of four transmission modes adopting different modulation and coding schemes is analyzed under a variety of channel and traffic conditions using the truncated queueing analysis. The network power is used as a criterion to find boundary curves of adaptive modulation and coding (AMC) scheduling for the cooperative wireless system. Two source node transmission protocols, namely the transmit-every-clock-tick (TREC) and the LAZY protocols, are examined for both the AMC scheduling and channel utilization analysis.