Traditionally, when working with a Mac, things just work. You plug things into it, and it talks to these things (see Apple ad video). Having purchased a Mac Mini a year ago, I have been slowly getting back into video editing and making movies. My first experience was digitizing my high school video yearbook to create a DVD. Recently I started a new project of putting together a video for a group of friends that took a trip together. We had used a brand new Sony DCR-SR60 camera and thought it would be very easy to later edit as this camera records the video directly to an internal hard drive. Unfortunately, it records the files as MPEG-2, which are heavily compressed, not importable by iMovie, not playable with sound by QuickTime and just all around difficult to work with.
After 15 hours of searching the web I came to the simple conclusion: Don’t get one of these types of cameras if you care about quality.
My goal in spending this time online trying to solve the riddle of getting my footage into iMovie was to find the best way with the least degradation to video and audio quality. What I found was that there really is not a good way. Here’s how I recommend doing it after my research. Please, if anyone credible has another idea, I’ll repost. 🙂
Solution
Step 1: Go buy the MPEG-2 player ($20 from Apple) so that QuickTime can even play this file. You’ll want it later to work with another application.
Step 2: Install MPEG Streamclip, a fantastic application with functionality that should be included in QuickTime Pro. This application allows you to demux the file, which strips the audio out of the MPEG-2 file and creates two separate files that you can import and convert to another format later.
Step 3: Open the MPEG-2 file (most likely saved as .MPG) in MPEG Streamclip and from the File menu choose “Demux to M2V and AIFF…”. It will then ask you where you want to save the two files. Make sure they go into the same folder as this will be important later when importing into iMovie. Note: My files used AC3 for audio, but unfortunately iMovie doesn’t support this either, so I had to convert the audio to AIFF
Step 4: Create a new project in iMovie with the default setting of having it be a DV based project (other options are MPEG and H.264, but neither of these turned out with high quality when I tested them)
Step 5: Drag or import the newly created MV2 file into iMovie. iMovie will convert the MV2 file to a DV file in the project and include the appropriate sound file. You’ll now have the clip in the project!
The above solution covers the following problems:

• “File could not be imported because QuickTime could not parse it. -2048”
• MPEG2 can’t be imported into iMovie
• Codecs: MPEG2 Muxed
• Type: MPEG program stream
  Bit Rate: 9.20 Mbps
  Video Tracks: 224 MPEG-2, 720 ◊ 480, 16:9, 29.97 fps, 9.10 Mbps, upper field first
  Audio Tracks: 128 AC3 2/0, 48 kHz, 256 kbps