just to clean-up with some legends here..
AVi is just a (old) media-container in the Windows world; container means: it wraps the content, which is 'somehow' encoded.. = codecs.
some avi import flawless into iMovie - due to iM-compatible codecs inside.
but..
avi can contain all kind of codecs, and mixtures of audio-/video-codecs, never seen before on the Mac-platform..
example: divx in avi, mpeg4+ac3 in avi, ...
soooo, we know, don't we, iM is for camcorder-imports, so a little selection of codecs is supported..
=> manual conversion; Mpeg Streamclip is best choice, spiced up with perian.org, it converts most stuff. the mp2-playback-component is only needed for conversion of DVD/vob/mp2 .. QTpro is not needed for MSC; QTpro is a converter tool too, but can not handle muxed sources (mpegs= lose on conversion audio)
if the way around iPhoto doesn't work:
import avi to MSC
convert to h264, or Quicktime/AIC