Can't import .mp4 or .avi files

I am unable to import .mp4 or .avi files into iMovie. I have iMovie3.0.3. I am able to import .mov files, but not the two listed above. Is this because i have an older version of iMovie or is it just not possible. I am new to using iMovie, but do understand something. Any help would be greatly appriciated.

I am sure I didn't get iMovie 4, my powerbook is over 2 years old.
http://img437.imageshack.us/img437/1526/imovie4at.png
I figured it was just because I have an older version. I've known that I can convert the files in QT Pro, I just do not own it.
I'm probably going to end up getting iLive 05.
Thanks for your help.

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