If the following suggestions work, please let me know and you can Accept the answer (and if possible, leave positive feedback). If not, please DO NOT Accept the answer. Instead, let me know and we'll try some more things or I can refer you to another Expert who may be able to help you further.
This doesn't sound like an issue of too many things on the hard drive to me. It is more likely a problem with iMovie
itself. Try running the general maintenance listed below on the computer. It is an obvious square-one approach. I normally suggest this first because it is good practice plus if we dig too deep into a problem and simple measures could have repaired it in the beginning we'll be kicking ourselves later... This is going to be a long email so I suggest printing it out for your reference.
First let's try a Safe Boot. This will perform several clean up procedures that may be affecting the machine's performance and startup.
1) Shut down your computer completely.
2) Start up the computer and immediately after the startup chime, press and hold the Shift key
3) Once the gray Apple and progress indicator appear, release the Shift key
4) Note: Startup will likely take substantially longer than normal
5) In Mac OS 10.4 or later, you will have to login to your account, even if it normally does so automatically.
6) Shut down the computer.
Now let's check / repair the disk permissions. Although this doesn't fix all problems it is a great way to start when working on a machine, besides it often cleans up any other smaller problems you may or may not be experiencing.
1) Restart the machine.
2) Before you have opened any programs, go to Applications / Utilities / Disk Utilities.
3) Run the Verify Permissions, then Repair any errors it finds.
4) Shut down the computer.
5) Restart and try imovie again.
If iMovie is still freezing up, then let me know. There are other things we can try. I'll stick with you until we get this corrected. Good Luck!