For you to convert mpeg files to something like mov in Quicktime to use in iMovie, you would need the mpeg2 plugin from Apple.
You can check out Perian as well
http://perian.org/
Perian enables QuickTime application support for additional media:
File formats: AVI, DIVX, FLV, MKV, GVI, VP6, and VFW
Video types: MS-MPEG4 v1 & v2, DivX, 3ivx, H.264, Sorenson H.263, FLV/Sorenson Spark, FSV1, VP6, H263i, VP3, HuffYUV, FFVHuff, MPEG1 & MPEG2 Video, Fraps, Snow, NuppelVideo, Techsmith Screen Capture, DosBox Capture
Audio types: Windows Media Audio v1 & v2, Flash ADPCM, Xiph Vorbis (in Matroska), and MPEG Layer I & II Audio, True Audio, DTS Coherent Acoustics, Nellymoser ASAO
AVI support for: AAC, AC3 Audio, H.264, MPEG4, and VBR MP3
Subtitle support for SSA/ASS and SRT