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What is the best? I am using the I-life, I-video thing on my mac. Is that good or is it worth buying a better one?

I heard good things about Final Cut.

Yeah, Final Cut is excellent.

EDIT: Horrible typo.

Is there a big enough difference to pay the money? I would just be using it for fun/school projects.

I recommend the program Ska used while making the N video.

Though, you should ask him which program he used, I forgot it. :P