I have had a ton of trouble today getting a rented Sony HVR-Z1U HDV Camera to work with iMovie '11 - I was having trouble both importing pre-recorded footage (in VCR mode) and importing live footage (in Camera mode). QuickTime Player would allow me to import video from the camera at DV quality, but I couldn't get HD.
I found that the camera was downconverting the video to regular DV (squeezing the pixels so it would still be a 16:9 widescreen picture) when using the i.Link (FireWire/IEEE 1394) port. After trying out a variety of settings, I was finally able to set up the camera so it would import (both in VCR and in Camera mode) HD video, directly into iMovie '11.
You simply need to set the following settings in the camera's menu: