Newbie Question "iMovie editing"

[H. Eddie Reed]

I have recently begun to fool around a bit with video editing involving 
splicing some short clips I have taken from a digital camera (30 second 
clips) as well as adding transitions and other affects. The question I 
have is in regards to using iMovie (2.1.1 on a 733 g-4 running os 
10.1.5) to do these tasks. Thing is the only access I have to the clips 
is off a CD I burned after formatting them to be opened with Q-time 
player. They are all .AVI's but I have yet to find a way to import them 
into iMovie ?

Could it be I need to use Premiere or After Affects to export to a 
different format?
Is iMovie limited to clips only brought fresh in from the camera/device ?

Any time and/or consideration given to this matter would be greatly 
appreciated.

Sincerely,

  <Eddie>