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Open the application called Handbrake
Select source, this will then bring up a window for you to browse to the video you are trying to convert. Once you have selected your video click open
Once you have selected the settings you can start the conversion by selecting start
Select the destination where you want
your formatted video to be saved to
and make sure the format is set to MP4
Your video file will now be converting into a MP4 format. Once the conversion has finished a the converted file will appear to the destination you selected. My destination was desktop..As you can see I now have a new file on my desktop.
Now the video has been converted
into a MP4 format you will notice
you will able able to import to video
into iMovie and will no longer be
grayed out like before