I am trying to import VHS tapes into iMovie. I am using a Sony Media Converter DVMC-DA2.
Not a fan of the Sony Media Converter.
I like the ADVC300.
http://www.grassvalley.com/products/advc300
The ADVC300 will take Audio and Video from any source (VCR, Tivo, Satellite Receiver) and convert it to FireWire (iMovie will treat it like a camera).
The ADVC300 also comes with a nice Macintosh application that works flawlessly with iMovie 06 and iDVD 08/09 (I have used it with iMovie 08/09 a few times too).
The program that comes with the ADVC300 has some nice filters that can improve video and audio of the source material.
I would use iMovie 06 with iDVD 08/09, why?
iMovie 08/09 uses 'single field processing' meaning every other horizontal line of the video is thrown out, which reduces the sharpness of the footage. iMovie 06 uses ALL of the image to form the video.
If your primary workflow is editing DV clips and making DVDs, iMovie '06 is better suited. Your movie will arrive at iDVD in DV format, which is an ideal match for making a DVD: same resolution, same pixels aspect ratio, and original quality. If you share your movie from iMovie '08 / 09, it gets re-rendered at 640x480 or less, and then iDVD upscales it back to 720x480. The end result is obviously not as good.
iMovie 06 and iDVD 08/09 is a 100% "lossless" combination and my DVD's look like they came from Hollywood!