Is iMovie '08 the right option for me?

We're week or so out from purchasing a HD Camcorder.
I've read a few posts on video quality concerns regarding iMovie '08? Can this be true? Will I be disappointed with my video quality because of weaknesses in iMovie '08?
If this is true, does Apple provide some other software to remedied this issue?
I imagine our video editing needs are very simple. I don't need a pro's version of editing software but I don't want to spend $1000 on a HD camera to ultimately sacrifice quality when importing into our Mac.
Help me out. Did I read some misguided posts or should I be setting myself up for disappointment?
Thx,
Brent

I have had very good results with iMovie 08 using AVCHD, DV and Analog-->DV. I have not experienced the degraded video quality that others have reported.
iMovie08 generally stores files in the original format. This is true for DV, and any editable format. For highly compressed formats like AVCHD, iMovie stores in AIC, which is a very high quality codec. To get better than AIC, you would have to go to something like ProRes 422 in Final Cut Pro which handles 1080p, 4k, and everything else.
iMovie outputs to h.264 which is also known as mpeg4 part 10. This is a very good codec that produces good images at relatively low bitrates. h.264 is customizable to various quality levels, and Apple provides presets that span this range.
iMovie shines in editing. With iMovie, you can edit almost as fast as you think. With iMovie 6, you get an idea and it takes half an hour. You do get more bells and whistles, but I don't need them. I want to show my family enjoying a holiday together and having a good time. I don't gain anything by showing this in slow motion with lightning superimposed.
Some people have been disappointed with DVD quality, which for DVDs is natively 480i. I don't find it different than the DVDs I made with iMovie 6, but it is possible that converting DV directly to mpeg2 could be different than converting DV to h.264 and then to mpeg2, due to the extra step. A commercial DVD at 480i will look much better than anything you make through iDVD at 480i, but this is because the commercial DVD will have a much higher bitrate, and used pro-grade equipment throughout.
I no longer make DVD's, opting instead for the WebGallery of .mac. I find that friends and family are quite happy to watch a five minute movie that you share 2 days after the event (and that you edited down from 40 minutes of raw footage), but they don't have time to watch an hour-long DVD which is delivered several months or years later (because you feel the need to fill it up).
Your mileage may vary.

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