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making Network commercial with IMovie8

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For a contest, I hope I can use IMovie8 to create a 30 second spot. I am an amateur, so please help and be blunt. There is no budget except borrowing. A Network commercial quality is required.

If I obtain a Vivitar DVR 840XHD to do the recording ('cause it is $180 at Radio Shack) will there be any degradation once it is loaded into IMOVIE8? What if I use a Kodak Zi6?

2. What can I use to capture audio (movie will require to have people speaking) if I use the Vivitar? Can I record the audio separately and add it to the project? If so, what type of mikes (or whatever) is available?

3. Is there a better and yet cheap way to get this done: industry quality video and audio using IMOVIE (only)? Do I need an editing software like FC?
 

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