FCE and mpg files

Hi folks,
I recorded video on a Sony SR-7 camcorder using the SD HQ setting. It comes out as an .mpg video file. I found i cannot import these video files into FCE 4.0 natively.
Do any of you have a suggested workaround for this problem? I have tried importing into imovie, but when i use those files in FCE, the quality is crappy. I tried using the TMPGE converter on a PC to mpeg-4 and avi, but none of those looked right when imported into FCE, maybe because i did it on a PC?
Any help would be very much appreciated. I would love it if FCE 4.0 just imported the SD HQ mpg files natively!
thanks in advance.

Unfortunately, FCE does not work with MPEG files. Do not use iMovie as a convertor, as it will decrease the quality substantially.
The best thing to do would be to first convert your MPEG files into something FCE can work with such as DV. You can do this with a program such as the free [MPEG Streamclip|http://www.squared5.com>.

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