I've also got the 'Webbie' and have been trying to get it to work in FCP 5.1.4...
First off, regarding the quality of the video: it's got a lot of compression and it shows. Those wave-like distortions show up with moving images really quickly. Low-light shooting is worthless. Well-lit scenes without too much movement are pretty good for the $'s.
Ok, as far as I can figure out (FCP noob), the FCP sequence settings need to be as follows (CMD-0):
Frame Size: HD 1440 x 1080
Pixel Aspect Ratio: Same as above
Field Dominance: Upper (Odd)
Timebase: 29,97 note, you can't change this when there is any video in your timeline
QT Video Settings: H.264
Audio Settings: 48 kHz
Depth: 24-bits (it should be 32-bits because that's what the Webbie outputs but FCP doesn't seem to support it, so you always need to render the audio before you edit it, but that's pretty fast)
With the above settings, I can edit reasonably well BUT adding video transitions and rendering those, result in a codec error. A friend of mine tried the same in FCP 6 and it did render. I suspect my codec needs to be updated. I've tried that but so far without success... (tips?)
I've also tried iMovie '09 and it seems to work reasonably well.
Oh, because of the high compression it's pretty CPU / GPU (?) intensive and rather slow to edit. Perhaps transcoding, editing, encoding would make the editing process a bit smoother, haven't tried.