All iMacs come with the basic iLife application suite on them, which includes iMovie. This is a fun and easy video editing package, ideal for the Mac user hobbyist who has home videos on a compatible tape or disk, and who wants to put together a bunch of clips from the tapes and turn it into a video to be shared with friends via YouTube, DVD, iPod, or their Mac MobileMe Gallery. 

iMovie lets you select clips of your videos (or the entire video), arrange them in order, add fun transitions, photographic effects (sepia tone, soft romantic focus, vignettes, cartoon effects and more,) voice overs and soundtracks, even title slides. It has some advanced features such as stabilization for all those hand-held jiggly videos, changing the speed, adding a freeze-frame and normalizing your audio for you, to name a few.

iMovie also works well for creating a slideshow of your photos. Simply drag the photos into the project where you can crop it, add the "Ken Burns" effect (zooming and panning slowly), set the duration, and add transitions between your pictures. You can easily combine pictures and videos in the same movie. Many animated title slides come with it as well, allowing you to create the perfect title intro for your home video.

Best of all, there are a lot of short video tutorials on http://www.apple.com/ilife/tutorials/#imovie that make learning iMovie easy.