You should heed the warning. Can't tell what the problem is. Might be the font somehow got corrupted.
I would try the oft applied maintenance of deleting preferences and doing a permissions repair. To delete preferences, close iMovie and trash the file named com.apple.iMovie.plist found in User (the house icon)/Library/Preferences. Also, drag to your desk top the FontCollections file (NOT the Font Book) found in User (the house icon)/Library.
Then do a permissions repair using the Disk Utility app found in HD/Applications/Utilities. In the left hand pane of the Disk Utility window select your hard drive icon and then click on repair permissions. Takes about 3 minutes to repair. Then relaunch iMovie and see if you still have the problem. iMovie will recreate the .plist file that you deleted, as well as the FontCollections file. After confirming that the FontCollections file has been replaced in User/Library, you can delete the one on your desk top.
If you still have the problem, you might try clearing the troublesome font out of your system, and then reinstalling, following the directions for "Installing a font" in the Help menu. Skip trying to drag into the computer folder.
I can't think of anything else to try right now.