Bob's doing great, so apologies for the intrusion.
In your original post, you indicated "digitized and grainy"...
1) What is the video quality setting in the camcorder?
2) How's the lighting when the video was captured? Poor lighting (low light or indoor, incandescent-only generally not good lighting) is the typical cause for what you report. It is easy to miss the pixelly "noise" (you call grainy) on the camcorder's small LCD panel as opposed to a much larger computer screen, TV/HDTV or other much larger monitor). If you capture video outdoors under bright sunlight, is the grainy video still apparent?
3) Which Mac, version OSX, RAM, version of iMovie and available hard drive space?
Clarification item: When you *copy* the files from the flash card, that is not "importing". With the camcorder connected to the Mac with a USB cable and the camcorder in computer mode, when the video editor is launched (iMovie, Final Cut or ?) and the video editor's Import, Capture or Log and Transfer command works with the camcorder to decompress and decode the video from MTS to something the video editor can deal with... That is importing...