In iMovie 7.1.2 or later, you may not be able to use your built-in iSight camera to capture footage in iMovie. iMovie may not recognize the camera. This may occur even if you are able to activate the camera in other applications, such as iChat.
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If you are experiencing this behavior, follow the steps below:
In Finder, navigate to /System/Library/LaunchDaemons/
Select the file com.apple.mio.VDCAssistant.plist and delete.
Restart your system.
You should now be able to use your iSight camera with iMovie.
This document will be updated as more information becomes available.