iMovie will edit audio well, to a point.
It is good for editing the camcorder audio, and then adding music, sound effects, or voiceovers.
However, it is not good at combining camcorder video with a better recording of the same event. Say you are recording a band, and you have cameras, but for sound you want to use professional microphones and combine the audio and video later. For this, I would recommend Final Cut Pro X.
Here are some resources for understanding how audio works in iMovie.
First watch this Tutorial from iMovie 08 days.
http://www.apple.com/findouthow/movies/imovie08.html#audioclips
Next, watch the video called All New Audio Editing to see some of the new features added with iMovie 11.
http://www.apple.com/ilife/video-showcase/