I Movie message:No Storage Location set while importing from HD Handycam

While importing media from sony handycam (HD file based cam) the following message appears after the clips are ready to be imported:No Storage Location set. Cannot start ingestbecause there is no storage location set. Please set one under Storage in Preferences and try again.

I think these are the steps I took:
1     Shut down the computer completey and then startup again (Camcorder disconnected)
2     Connect camcorder and in iMovie follow the procedure to import from camera. This triggers the launching of iPhoto - but as iPhoto started to launch I had the mouse pointer on the iPhoto icon at the bottom of the screen and right clicked the mouse with the option button held and selected 'Force Quit'
It worked for me and I hope it works for you! Later when I went to import again, both iPhoto and iMovie behaved as expected.
The whole thing is a mystery to me and the original message is no help at all and gives no guidance as to how to solve this (common?) problem.
Hopefully this 'bug' can be fixed by Apple engineers -fingers crossed.

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