Apple has just released an update for iMovie, fixing three bugs including one regarding video from the iPhone 3GS. Apple notes that iMovie 8.0.4 "Improves overall stability and fixes a number of other minor issues," including:
-Fixed a problem with incorrect rotation when working with video created by iPhone 3GS
You can get the iMovie update by opening Software Update (Apple menu > Software Update), or by downloading the installer package from the Apple website.
