Old Home Movies conversion help needed! Please!

I have about 18 hours of various movies that had been built in Pinnacle Studio (transitions etc.) on a PC Computer. There is no disc chaptering and this is a PC only program. I want to bring them over to iMovie or another program on my new iMac and have the end result to put them on USB. Pinnacle said that burning to DVD would be the only way to incorporate menus and chapters etc. Is there any way for iMovie to do this? or another program? We just want to be able to have them on USB to distribute to the family and have them put in their computer and be able to play back the various movies and have the option to fast forward or skip to a certain part in the movie with scene selection etc. I have several options to export the Pinnacle movies. Mpeg1, mpeg2 and a few others.
Any help or direction would be appreciated. We don't want to have to chop our videos to burn to a bunch of DVDS if possible.....

I can't answer your question completely but I will try and fill in a few blanks. Perhaps others will add more later.
I would try to make your final result a DVD. When you put video on a USB stick you have simply created another file that may, or may not work, in the future. You can certainly do that if you wish, but I would also make a DVD. The advantage of DVDs is that they are foolproof and universal, and most likely to be viewable for the next 30 years.
I had good success with iMovie HD 06. Readily available on Amazon as part of iLife 06. Most files can simply be dragged into iMovie HD 06 and it will automatically convert them. It may be possible to do this with newer versions of iMovie but I rarely use those. I prefer the higher quality of iMovie HD 06.
For DVD making use iDVD 09. I recommend the 09 version because it is the only version that includes all of the themes. Newer versions have had themes removed.

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