If you're pulling the footage from a VCR, DVD Player, or DVR player then you will need a bridge (not familiar with these) to transfer that footage into digital video while importing into iMovie, FCP, Toast. Or if you have a digital video camera some can do that by running your video source through the camera into the Mac via firewire. I have a Sony Digital Handycam and I can just plug my VCR into it and it will display what is playing from the VCR...I can then select import in iMovie and it will import what's playing from the VCR.
Also, I believe there may be some apps that allow you to pull video from DVD's that are in your Mac's drive.....not sure what they are though.
The iMac G5 has a 4X DVD-R burner. It will burn a full disc with 4X media in around 13 minutes I think. But when using iMovie and iDVD you will have lots of rendering/encoding times that will have to come first (which will essentially allow you create the video the way you want it to look and compress it to fit onto a DVD for watching on DVD players.