Is my iMac capable of handling HD video?

I plan on upgrading my 6 year old Mini-DV camcorder in the near future and would like to be able to continue to import and edit my footage when I make the switch to an HD camcorder. My computer specs are the following:

Late 2007 20" Aluminum iMac
2.4 Ghz Intel Core 2 Duo
4GB DDR2 Ram
ATI Radeon HD 2600 Pro 256 MB
Mac OS X Lion 10.7.2

I use Final Cut Express 4 to do video work. Do you think I'll be able to handle HD video? I understand I'll have to convert AVCHD files first, but I just want to know if my machine is strong enough. Thanks

I have never tried to Edit HD on that machine, but that i my current Mac that I use for most everything. It plays any HD without an issue. I am sure you can edit HD also. It's not going to be a fast as a newer Quad Core or I7 system, but I am sure it will work.