I have recently bought the new sony DCR-PC1000E pal camcorder and am
having problems capturing the video on my mac. I am using OS 10.3.9 on
a 700mhz G4 with Final Cut Pro HD(v4.5)& Imovie HD (v 5.0.2). I have
captured some footage but it seems to be unreliable and only sometimes
the mac reads the firewire input. I want to know what updates I
require or which preferences I need to change to make this camera
compatible. I cannot upgrade to Tiger (OS 10.4) due to the speed of my
processor. As far as I am aware the camera is too new for the
software, so please only answer if you have a valid solution. thanks

I can't tell you right away what is going wrong.
But could it be that you have filevault activated on your home directory?
If so, move your project folder to a location outside your home directory.
I also advice you to take a look at the support discussions on www.apple.com
Chances are high that you will find an answer there.
And also your iMac is prefectly suited to run Tiger (OS 10.4), the
speed of your processor is more then high enough. You might even
experience an speed improvement when after installing Tiger.

Good luck,
Bart