iM is a DV-editor, meant to copy (=import lossless) from miniDV camcorders via firewire ...
means: no all-purpose-all-video-editor...
and:
.avi is just a container, no 'video format'... read your devices manual and tell us, what codec is in use...
so, to convert other codecs than dv (as in use with miniDV/iMovie), you have to convert your files first...
tool No.1 is
Streamclip (free), but some camera manufacturers 'brew their own stuff', meaning: exotic codecs...
tell us brand & type of your device, maybe we find a workaround...
for serious movie-making, get a miniDV camcorder.. 😉