Before you begin read a tutorial or two about chroma key backgrounds. There are issues with the lighting and such you should be aware of before you expect perfect results. That being said, iMovie is rather forgiving when it comes to the range of chroma it’s keying out.
Enable iMovie’s advanced controls. You can find this in the Preferences.
Throw your video loop into a new project. Make sure the loop is long enough to go all the way through your greenscreen footage. (For our 5 minutes announcements, I have a 10 min. loop “just in case”)
Drag your greenscreen footage on top of the video loop. Try to line it up with the very edge of where you want it to start. A little menu will pop up – select “Green Screen”
If you want to add overlays or any other video “tracks”, you will need to export the unedited greenscreen + loop and reimport it into iMovie. Then, edit the movie and do all your other titles, overlays, etc.
Voila! iMovie 09 is very generously (and somewhat secretly given that these are not default “on” features) giving away a feature that I’m sure sold many copies of Final Cut Express.
Despite the obvious limitation of multiple tracks (that can be worked around), adding 10 minutes to post production can make the announcements look significantly better and is totally worth it.