This is just a guess, but...many WMM problems are caused by non-compatible
source files; have a look at this URL (applies to Vista as well):
http://www.myvideoproblems.com/Tutorials/MovieMaker/File_type_compatibility.htm
The REAL problem lies with Movie Maker, a real piece of crap from
Microsoft. I do videos professionally. I've editing hundreds, burned
over a 1,000 DVD's, I have ZERO problems. Why? I wouldn't touch Movie
Maker with a ten foot pole. It sucks big time.
If you're serious about Video Editing get a flavor of Vegas from Sony.
While the professional version is expensive, over $600 last time I
looked there is a studio version for under $100 that's also very good.
You get what you pay for. Movie Maker is free, so don't expect much
out of this poorly designed and even worse implemented toy.
As far as non-compatible source files THAT points to the application
you attempt to use to work on the video files. Since Movie Maker is
really just a toy it stumbles on many file types other video editors
accept without any issue. Another common issue with video files is
many, especially any downloaded off the web or from newsgroups have
one form of corruption or another. You need some "fixer" application
to get past these kind of errors. One such FREE application is Virtual
Dub. A little geeky to use, but very fast and powerful.