Yes, iMovie is the one that's part of iLife. I'm not a fan of it (although I don't have Jess's level of burning hatred), but others are -- it's certainly worth trying out to see if it fits your needs. (Also note that iMovie is frequently updated, and they tend to make huge changes between revisions, so the version your friend uses may be very different from the one you get; there are a lot of people out there holding on to versions they like better, and so some confusing info out there.) (As always, ask here first and we'll get you sorted out.)
Final Cut Express is Apple's mid-range video editing software. It has an interface that's much closer to the very expensive Pro stuff, but without some of the features; the latest version will run on your machine, but with some limits -- in particular, the raw video from some High Def video cameras comes in a format that only works on an Intel machine.
Final Cut Pro is expensive enough that you should only get it if work is paying or your passions and livelihood depend on it. And complex enough that you probably won't feel a need for it until you've gotten the basic concepts down on something easier to learn anyway.
Ultimately, the right fit depends on what you want to do -- iMovie is popular for putting together vacation/wedding/f2f stuff, but much less suited for something like (fan) vids, whereas FCE or FCP allow a lot more control if you want to get exactly THIS frame synched to exactly THAT music beat.
(surely x-posty as hell by now...)