New iMac Intel, won't do transitions, error message HELP!

Question

My daughter just bought a new Intel iMac, specifically for the purpose of making movies with iMovie. She has run into a problem trying to do transitions, using primarily Cross-Dissolve. Sometimes she can put them in and iMovie renders them. Then, other times, doing the same thing with the cross dissolve on another photo or clip, she receives this message: "An unknown error occured - You may be able to continue without any probelms. You may also wish to save, quit and relaunch imovie HD"
When she saves, quits and relaunches, the transition is not saved and she has to try placing it again. This has happened over and over; quit, relaunch. Inconsistent results in that sometimes she can put transitions in, and sometimes she cannot.
She has repaired permissions, deleted iMovie's and iPhoto's plists. No resolution of the problem.
This is a brand new computer. She did the iLife upgrades just after setting up the computer, when prompted to do so by Software Updater.
No one else is using the computer. She has a huge hard drive.
What can help?
I saw that this same error message question was posted in November 06, with 0 responses.
We need HELP!!!

Answer 1

So far, she has just begun to create a new iMovie. Wants to transfer the video clips from the old project, as they are already edited. She is going to try that, knows it may be a problem, but thinks if she doesn't empty the trash, and reimports the photos, she might be ok.
Thanks for the luck wishes.
My daughter is my offspring who made an iMovie before I did using 'iMovie for Dummies' with v2.
Other than that, she used her Mac computer only for school papers and emails. She used to call me from college and tell me the Mac had broken, and I would talk her through whatever problem she was having. She became quite good with Macs, but then switched to PCs after she got married to a software engineer. She now is great with them, but really wants to make movies and iMovie is much easier than the PC movie software. I was hoping that her project would go well, but she becomes frustrated so easily. She had just put in about three hours of work on her project when she ran into the transition difficulty. She has finally forgiven me for not mentioning the caveat about emptying the trash. I asked her if iMovie warned her first, but she said something about not understanding the message and just emptied the trash anyway. With 250GB on her drive, she has no need to free up space by emptying the trash!
Will let you know how this new effort goes. Thanks for the support.