Can't import mpg files into iMovie

Hi I just bought a Mac (new user) and wanted to edit some old movies I had saved as an mpg file. However i can't import it into iMovie to edit it which is disappointing as I was looking forward to doing that. Anyone got any suggestions?

Once the file is converted, is it sufficient to drag and drop into an iMovie event? I tried, and certain conversions still gave me the message "not compatible with iMovie". Others, it appears the files slid into the iMovie event, but when i clicked on that event, they were no where to be found. (says "no matching files"). Any help will be greatly appreciated- I am a newbie and am lost!!

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