It is compatible, but it may cost you 20 more dollars
iMovie does not work with muxed MPEG-1 and MPEG-2 clips (and that's what you're trying to do)
http://docs.info.apple.com/article.html?artnum=42996You'll need:
MPEG Streamclip 1.5.1 (free) and the MPEG-2 Playback Component ($20 from Apple).
http://www.alfanet.it/squared5/mpegstreamclip.htmlhttp://www.apple.com/quicktime/mpeg2/Once you do that, to transfer the data to the iMac:
1- Plug the USB cable, once detected (5s), press HDD on the touch screen panel
2- Go to Finder (on the Mac) then open the videos folder /MP_ROOT/100PNV01/M2U0001.MPG for example
3- Drag the .MPG file to the mac
4- Start Streamclip (see message further up the discussion)
Export using for example .DV format, readable by I-Movie.
5-Import the new file in I-movie
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