"that clip needs to be optimized"

I'm trying to add a clip to a movie trailer, and every time I select video, I get the "Alert - That clip needs to be optimized" window. I've optimized it multiple times, both "full" and "large" but it gives me the alert every time. I can't delete the shot from the trailer (ie, and just bypass the need for another clip), but I also can't add any of the video in.
Help?

Right-click on the clip (or Control-click) and see if it offers to optimize. If so, say Yes.
You can also right-click on the clip in the Event and see if it offers to optimize. If so, say Yes.
If it does not, come back and I will give you a different way to optimize.
If you want to understand what is going on when you optimize, your camera shoots in a very compressed format. This is usually either AVCHD, h.264, or MPEG2. These are called Long GOP (group of pictures) compression techniques. See my post here for why it is good to convert to i-frames (or optimize) before editing.
https://discussions.apple.com/docs/DOC-3941

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