Several sites have noted that once you've imported a JPEG into iPhoto, the image is no longer usable in iMovie. After a bit of testing, I verified that this was indeed true - no image in my new 1,000-image library was importable in iMovie. Knowing that the files were still, in fact, JPEG images, I figured it couldn't be too hard to find out what was preventing iMovie from seeing the image files as importable. As it turns out, my hunch was correct ... remember, you saw it here first! :-)
The Answer: If you want to import an iPhoto-captured JPEG into iMovie, all you need to do is set the TYPE attribute for the image in question to "JPEG". You can do this in Classic with ResEdit. There should be a way to do it using the "XFiles" utility in OS X, but the attributes section was greyed out on my machine. Once you've set the "JPEG" type code, you should be able to import the image into iMovie. It appears that iPhoto strips the "JPEG" type code, and iMovie only sees images that have this type code set.
I tested relatively extensively with iPhoto, and it appears there are no downsides within iPhoto. All of the images I tweaked are still functional in iPhoto, and yet they are also now usable in iMovie. Still, make these changes at your own risk (but it's easy to change them back if something doesn't work right!). I guess this is a limitation on iMovie more than iPhoto - it appears iMovie ignores any image that doesn't have it's TYPE set to JPEG (this is conjecture on my part, though).
Of course, changing one image at a time is a bit of a pain, so read the rest of the article if you'd like to know how to change a large number of images at once using the Terminal (requires the Developer Tools as well).
While ResEdit is OK for changing a file or two, it's a pain if you have to open and close every file you wish to update. Instead, I fired up the terminal and just typed:
cd /path/to/iPhoto/archiveThat's (nearly) it. Now every .jpg file in the directory has its "type" code set to JPEG. I was feeling quite good about this neat solution, but when I went to import in iMovie, the images were still not available.
cd /2002/some/image/folder
SetFile -t JPEG *.jpg
Mac OS X Hints
http://hints.macworld.com/article.php?story=20020117235849675