Dumb Question.

Hello. I recorded a short video clip with my digital camera. It is in iPhoto now but i want to send it to iMovie to make a short video of it and other clips. How do I do this? Simple Drag and Drop is not working. Also, when I'm in iMovie and i click on File to import digital videos, the file comes up in an "MPG" format and won't let me use it in iMovie, only in Quicktime. Hope you can help. Happy Festivus.