This is what I know so far.
1. Clips shot at 1080i 17Mbps can be imported straight from the camera to iMovie 09. These clips I understand are converted to AIC, and edited. If the movie is exported to iDVD via share to Media Browser, the resultant movie is .mov file, and an acceptable SD DVD can be made. I felt that the colors in the movie were changed a little (there was a yellowish cast) and there certainly was a degradation in sharpness. I did the export at Large setting, and have not tried HD yet, but plan to do that next.
2. Clips shot at 1080p 28Mbps have to be copied from the camera memory manually. I then converted the .mts files to MPEG4 (.mp4) movies using Handbrake. I found that before these .mp4 clips could be used, it was necessary to deinterlace (with JES Deinterlacer), converting them to .mov files. It was not that you couldn't import the .mp4 files to iMovie, but that the DVD resulting from that process was full of artifact, and totally unacceptable. Importing the deinterlaced clips, editing and sharing to Media Browser at HD setting resulted in the best quality DVD I have made yet. Sharpness was acceptable, even though not the same as original, but again, there was a yellowish cast to the colors. If you had not viewed the original, you probably would have thought that it was a fine effort. I will add that all these movies look fine when viewed through the viewer on the Mac. I will probably also be looking at other alternatives, such as Streamclip, and maybe even the converters that are not free to see if improvements can be made.
There are other ways that have been pointed out to import and edit movies for different forms of playback, such as off a media player or PS3. So far that has not been my goal, which has been to produce acceptable DVD's to distribute to family and friends. For those other forms of playback, I think that you can get output practically indistinguishable from original.
