Tiff or JPEG better quality in iMovie?

Not much difference as your imports are converted to the dimensions used in your iMovie Project.
TIFF is a better format of image files (looses much less data). JPEG can also be used but they are "compressed" to "fit" your project.
But, either is correct, for image files.
They become DV Streams files after import and any format will be resized to 720X480 of NTSC formats used in iDVD.

Hi QTK:

Just learned all of that myself after reading your book!

;)Sue

Thanks for learning, Sue!
QuickTime Pro image format imports are a different Apple than images used in DV editor such as iMovie.
Did you know, assuming you have a very fast Mac or PC, that you can import nearly every major image file format via QuickTime? How about 60 fps screen grabs in .pdf or .png or video formats?
You could, in elementary theory, assemble an HD image sequence?
QuickTime Pro has so much power and it is the basis for such "i"Apps as iMovie, iPhoto, iTunes, and the higher end "Pro" apps like Final Cut and Logic Pro.
Apps like Apple "Preview" (an image viewing application) are also built on the core foundation of QuickTime.

PC users still get "Picture Viewer" when they install QuickTime? It is Mac's Preview app now.
QuickTime.
It is so deep into the Mac OS it would be impossible to separate it from the OS.
QuickTime helped develop our Mac "eye candy" experience.
It also helped developers understand the rules. And game developers create such rich graphics.
Even HD TV owes a bit of gratitude to the software engineers behind it.

There seems to be a difference whether the imported image has an embedded color profile or not. I very rarely use stills in iMovie projects so I haven't much tested this though.