So here is my basic workflow. What I would ideally prefer is the red line but right now, I need to process all the captured streams from my HD PVR through Handbrake before I can edit it in iMovie.
Now, I'm using a PC to capture the HD PVR stream because I had a PC lying around with a lot of storage space and it was technically free. If I opted to purchase an additional application for my Mac, it would have driven up start up cost. Plus, the application I tried didn't work quite as advertised which I will explain in a little more detail.
As you can see, I am processing the captured streams in Handbrake so that iMovie can work with the captured content. It seems that the h.264 default encode option for .mp4 ("Xbox" option) in the Arcsoft program doesn't play nicely with iMovie. My guess is that it's because it's encoding in 60fps instead of an iMovie friendly 24/30fps. It's the same with the capture program available for the Mac. Forgot the exact name of it but it exhibits the same stuttering during playback in iMovie and almost all players for whatever reason when it's converted from .m2ts to .mp4. Puzzling to say the least and I will look into this in more detail when I have more time but right now, I'm opting to output the HD PVR stream to a .TS h.264 format and then convert that .TS file to a 29.97fps MP4 h.264 file.
Now, I've learned the hard way that h.264 doesn't actually play all that nice with iMovie. Something about it being a compressed playing format instead of an editing friendly format. iMovie needs to decode on the fly while I'm editing these h.264 clips and it really makes the program feel ... laggy. I am going to try to just convert the clips that I'm going to use in the project to see if that will help but I think it's going to just do what I'm trying to avoid - use AIC and it's HUGE file sizes. After going through capturing, encoding to only reencode again to application friendly format is making me go nuts.
I believe I can skip the whole Handbrake part but that requires additional investment in my part - Final Cut Pro X. I believe it can edit .ts/.m2ts files directly and rendering those h.264 files might be a bit faster in FCPX than iMovie but I have no proof of this. That and well ... it'll cost me money. Ugh. But yeah ... right now, this is where I am now and it's driving me nuts.