please help, drowning in jargon!

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Admittedly I'm just getting into this video and picture editing but the jargon is overwhelming!

I want to be able to capture my new digital handycam images (HC19 if anyone is interested!) and create something fun - e.g. video clips with sound and some effects. Movie Maker seems fit for the purpose but I lose quality both in creating slide shows and in video - this is where it starts to get very confusing. From what I have discovered Movie Maker 2.1 should retain the picture quality of static pictures (mine are 5MBps) but I can expect some degredation in quality in video. It's disappointing to create a nice slideshow from sharp still images (5Mbps) and for movie maker to cause loss of quality.

I'm buying a DVD writer so hopefully my existing CD RW won't be an issue with quality. I'm buying a firewire card and cable. I have not bought any specific software yet because Microsoft Movie Maker seems ok until I really understand what my needs are.

I guess I need some basics.
 

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