Sorry! I posted this in the wrong area and so didn't see that the ground has already been covered.
Just to keep the response up to date (as this is quite a confusing issue to laymen) I have taken the liberty of copying and pasting these words by Aric:
"Yes, you have to create a new project in imovie, then open the folder for that new project and put your file into the media folder. Now when you open your project, it'll give you a message that you have a file in your media folder and how you want to use it."
Which covers it nicely! thanks on my part to Aric & Jonas and all the others involved in that discussion.
[This message has been edited by JetShave (edited 02-01-2001).]