but this is a start.
iLINK CONV must be OFF. iMovieHD does the controlling - play, fast forward, rewind... I am looking at my camera (now connected to my G5 flatpanel) as I go through this. I have also successfully connected my camera to my son's iMac CoreDuo.
Anything else you set on the camera should be reset. Perhaps going back to the factory defaults would be best:
1) Power off the computer, Power off the camera.
2) Remove the tape from the camcorder, close the camcorder tape door.
2) Disconnect the power from the camera and remove the battery.
3) Move the power switch to ON and hold it there for 15-20 seconds.
4) Move the power awitch to off.
5) Replace the battery.
6) Reconnect the power if you had it plugged in (recommended for transferring video).
7) Reconnect the FireWire cable to the camera and the Mac.
Power on the Mac. When you are at the desktop of the Operating System,
9) Power up the camera.
10) Launch iMovie HD.
If this did not work it is possible that the FireWire cable is bad.
It is also possible that if you connected the FireWire cable to the computer first, then the camera - when the computer and the camera were already on - that the camera-side connection blew the FireWire chip in the camera. The only way to trouble-shoot this is to connect it to another known, working, computer - with a known, working, FireWire cable.
I use a Sony HDR-HC1 - your camera's older brother...