Since iMovie only uses one file format (.mov - QuickTime) and two video codecs (Apple Intermediate Codec for HD and SD footage and DV codec for DV footage) to store imported video, there should be no problem transferring footage.
If you can easily transfer a project from iMovie HD to iMovie '11 is another question, which might be answered via a www search.
Imported video, if not changed in the settings, is stored in
Macintosh HD / Users / YOU / Movies / iMovie Projects / ... .
As for getting the finished sequence on DVD, if you still have iDVD, you can use the SHARE feature in iMovie (again, a lot of guides can be found via www search with the terms "imovie share/publish to idvd") to get that sequence into iDVD. No need for MPEG-4 compression, as video DVDs use another compression (MPEG-2), thus you will lose image quality, albeit not immediately visible.
I do not know if the following can help, but it contains valid information about containers (formats) and codecs: