I followed Steve Tanguy's advice about importing HDV footage and it worked like a charm. However, I need to import SD footage and once again FCP isn't recognizing the device. What are my settings for SD?
Shut down Computer, connect your DV Device - start up again - after you opened press "Check A/V Devices" in FCP.
Open the Log & Capture window (Command "8") -> in there make sure that under the Capture Settings Tab -> you are set to FireWire PAL (if you are in PAL land).