Hi Bob,
Welcome to iMovie Discussions. Since your camcorder is not on the supported cams list:
http://support.apple.com/kb/HT1014#2
I'm afraid you are into a lot of work, wasted time and less quality in your video results, if you wish to proceed using that cam.
DVD camcorders are not a good cam choice, IF one wants to edit their video. DVD's are an end product, not intended for editing. They are designed for those that just want to shoot their family video and watch it on the TV tonight sort of thing. Their MPEG2 format needs to be converted to the format that iMovie wants to see, that being DV (Digital Video) and this process will degrade the video quality, possibly to the point of it not being worth watching.
Since you have a new iMac, you have the latest version of iMovie, that being 08 and although it is good for quick little You Tube type movie productions, the far superior editing platform of the earlier version, iMovie HD6, is preferred by many who have used iMovie software for many years.
This HD6 version is available to you as a free download and if you want to use that version, you MUST have a miniDV tape cam, as they record in DV and work seemlessly with ALL versions of iMovie.
Therefore, my suggestion is that you now invest in a miniDV cam and have happy movie making experiences from here on in.
