Welcome to iMovie Discussions.
"..Are there any digital camcorders that actually work with IMovie?.." ..Every miniDV, Digital-8 and HDV tape-based Sony, Panasonic, JVC and Canon I've ever owned which has had a FireWire connection (..and a Panasonic which records onto a memory chip in AVCHD and outputs via USB..) works for me with iMovie. Every applicable version, from iMovie 2 to iMovie '08.
Note that the earlier versions, like 2 and 4 (least said about 3 the better) were more "forgiving" about timing issues, etc, and each of the later versions has "tightened up" on implementation of the FireWire standard ..giving problems to some people using the latest versions (..like HD 6 and iM'08..) with some of the less mainstream - e.g; Samsung - camcorders.
So, sorry to be so positive, but iMovie works perfectly for me with those camcorders named above, on an old G3 PowerBook, on two G4 PowerBooks, a G5 Tower, and an Intel Mac mini.
Perhaps the more mainstream-ish camera manufacturers may have stuck closer to the
full FireWire specs than makers of slightly cheaper, less mainstream models ..just a thought, no offence intended..
P.S: Have you updated to the latest version of iMovie '08? ..That's iMovie 7.1.4, in the right-hand column on
this page, and try updating iLife '08 to version 8.3, also available in the right-hand column on
that same page.