Hi,
I've been looking at this myself.
My chosen method (though I've not done it yet) is to playback the VHS on a VCR (preferably with S.Video output) hooked up to a MiniDV camcorder which in turn is hooked up to your iMac.
Most modern MiniDV camcorders offer a pass-through mode, which converts incoming analog video into digital data, and then transfers the data to your Mac via FireWire. You'll need to adjust the menu settings on the camcorder.
You'll also need to connect audio cables between the outputs on your VCR and the inputs on the MIniDV Camcorder.
Turn both devices on, open a new iMovie project and start importing the film.
Edit: Watch the size of the files though, consider a large external drive for storage