Unfortunately it doesn't look like iMovie even accepts mpeg1. So mpg files are mpeg1 are they?
MEncoder looks like my best bet. Well, it did:
$ mencoder input.avi -o 19932.mov -oac pcm -ovc qtvideo
SwScaler: BICUBIC scaler, from Planar 422P to Packed YUY2 using C
Cannot find requested component
FATAL: Cannot initialize video driver.
Pos: 0.0s 1f ( 0%) 0fps Trem: 0min 0mb A-V:0.000 [0:0]
1 duplicate frame(s)!
Segmentation faultf ( 0%) 0fps Trem: 0min 0mb A-V:0.004 [0:0]
I'm hoping that, whatever I do, QuickTime Pro might be a last resort that'll work: http://www.apple.com/quicktime/pro/specs.html
This is complicated. I just want to edit my videos!