I'm sorry that I can't really help further, as I don't know about the menu settings in a Canon (..if the same thing happens with a Sony, then adjustments to the camera's menu settings will usually or often solve the problem).
If there is a setting in the Canon's playback menus in which you can choose between AUTO, HDV and DV, then set it to HDV.
Because - when in iMovie's Automatic import mode - it continually starts, rewinds and tries importing again, that might indicate that iMovie can't get a "grasp" on the video which is supposedly coming in from the camera. So that might indicate a wrong setting in the camera's playback menus, or it might indicate a missing Apple Intermediate Codec (..though iMovie would probably warn that it's missing, if it is..) or there might be a conflicting video-handling "codec" somewhere in your QuickTime folder
IF you've downloaded any other QuickTime plug-ins (..such as, possibly, "Flip4Mac" or something else for playing Windows media).
But I'd concentrate, first, on your camcorder's settings: make sure, for example, that you haven't enabled any HDV>DV conversion for exporting from the Canon, etc.