To set up a camera for a time-lapse video, you need a tripod and a remote control.
Use Command-T to chop up a clip in iMovie.
When you chop up a piece of video, always think of it as creating three pieces with two cutsthe piece ahead of the clip you like, the clip you like, and the piece that trails the clip you like.
To create the time-lapse effect, simply delete the pieces you don't like.
The time-lapse effect works best with 1-second cross dissolves between clips.
Use your iSight camera as a source for making videos; if the camera is attached to your Mac, then the video is comparable to the time-lapse video in terms of how you might edit it.