I took the plunge and updated all the apps on my iPad2 that indicated one was available. I didn't research this; I rarely do with Apps.
Then I found that the updated Keynote, iMovie and Pages apps were "not compatible with this verson of the iOS" but I had iOS 5.0.1 (9A405) which, I thought, was the most recent. What now?
I then discovered that an update was in fact available (iOS 5.1(9B176)), but my iPad was set to check sometime next week which is why I hadn't be notified.
As soon as I did the iOS update on my iPad, I was able to create a song in GB and send it to iMovie; iMovie opened automatically with that track in a new project. If other projects exist, a choice will be presented: create new project or the last edited one. There doesn't seem to be a way to import the song from iMovie. Once the GB song is made, it stays on the iPad and can be sent to any existing or new iMovie project. No longer is any tethering needed.
So if you want to update GarageBand, iMovie, Pages, Keynote apps (and probably Numbers), do the iOS 5.1 update first. You'll have less frustrating experience.
(This same iOS update adds neat features for the iPhone, too)
"The secret of education lies in respecting the pupil." -Emerson