The Teacher Tube video in this post shows the basics of making a green screen movie using Final Cut Express ($200 from Apple). It might seem a little intimidating, but isn’t too bad.
Kathie (Omaha, NE) told me about a green screen plug in for iMovie. You can get it here. It has a nice description of it too.
I use green screen for going back in time or to add a little spice to student movies. There are some samples on my movie page. Check out Lost in Time 2 and 3 and Periodic Temptations.