I have heard many people complain about iMovie, etc. not supporting the iSight. However, QuickTime Broadcaster (a free download from Apple) does. You can save the video to disk in many formats, including DV, from where you can then use the footage in iMovie, etc.. You can also tweak the color settings on the camera.
Mac OS X Hints
http://hints.macworld.com/article.php?story=20030626014137767