Hi Jared,
you have connected your camera via FIREWIRE not by the included usb cable? iMovie doesn't support the later..... get any 4/6pin fw cable for few$ at any electronic supplier.... and: a Mac doesn't need "drivers", only younger, immature Operating Systems need such ;-)))) (I know, in technical terms this rant is wrong, but I can't resist.......)
you try to "download" the content on tape, not any stills on any chip/memorystick/whatever? iM is meant to work with miniDV video only - in that case, miniDV means also a compression standard.... any "mpeg video" has to be imported via the app "image capture" and has to be converted with additional tools....
iBook 700/Cube 450superdrive! Mac OS X (10.3.9)