Using Vado HD with Final Cut Express

I am aware that the VADO HD is not compatible with iMovie, but is it compatible with Final Cut Express? If so, during setup of FCE what option should I use for setup? HD, NTSC, PAL, Apple Intermediate Codec, or DV/Panasonic and then under "use" which option should I use?
thanks for ALL of the help!
tom

crap.
Ok, maybe you can answer a follow up question. So, I'm new at this.... but I understand that I will have to convert the video then. In that case, is there an optimal video conversion type that I should use so that I lose the least quality? I am using MPEG Streamclip as my conversion tool.

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