There appear to be quite a few people with similar postings about iMovie (and not just iMovie HD) suddenly stopping working for no apparent reason. (check out postings 167, 219, 288, and especially 506 in the
http://www.macosx.com/content/faq.php/c24/Mac-OS-X-Applications-iLife-Apps.html Questions Asked list. I have experienced exactly the same problem as you - but there was no upgrade involved - iMovie at home just stopped working last night, with exactly the same symptom you describe (I have a Canopus box, as well.)
The only help that has been suggested - and it seems a little crazy - is that one of the sources suggested that opening Garage Band and playing a few notes on the on-line keyboard - seemed to solve the problem. I'm at work, so I haven't tried this suggestion - but will when I get home.
I'm going to post this as a new topic to see if there's any other general insight to this issue.
Good luck!