Convert mpeg2 to mpeg4?

Hello all,
I bought a Hitachi DZ-GX3200 DVD camcorder a while back, before I purchased my new iMac. The Hitachi camcorder unfortunately only has a USB connection. I found a way around this by installing the software that comes with the camera, which has allowed me to save videos to my hard disk. However, the videos are in MPEG2 format, and iMovieHD won't import them. And that is where I'm stuck right now.
Do you know of any software that would allow me to convert MPEG2 files to MPEG4? Alternatively, can you think of any other suggestions (aside from buying a new camera -- I dropped 700 bucks on this thing 6 months ago ) that might help me? I'd really appreciate it.

http://www.apple.com/quicktime/mpeg2/
More info about the MPEG-2 Playback Component. Please read the FAQ page before you buy.
http://www.squared5.com/svideo/mpeg-streamclip-mac.html
More info about MPEG Streamclip.
Muxed file formats (MPEG 1 and 2 and Flash) have all the audio and video "tracks" inside a single file. QuickTime (and Apple's "i" apps) can't extract the audio portion of these formats. MPEG Streamclip can extract all the tracks and convert them to DV Stream (.dv) which is the format used by iMovie.

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