Shoot that Idea

Import Video

Drag video files from Windows Photo Gallery into Windows Movie Maker.

Edit Video

Split and combine one or both of those clips again into smaller clips, and so on.
You can also combine certain clips to make larger clips. When you split an audio or video clip, you divide it into two clips. You can then split.

Tips:
Split = CTRL + L
Combine = CTRL +M

You can also add on 'transitions' and 'effects'.

Transitions

To controls how your movie plays from one video to the next.
You can add a transition between two video clips. You can change the playback duration of a transition up to the duration of the shorter of the two adjacent clips.
Eg: fading in from a black screen, sliding one clip across the screen to reveal another, making it appear that one clip is shattering to reveal the next and etc.

Effects

You can add special effects to your movie as well.
Eg: You could add one of the Film Age effects to a video clip, picture, or title to make it looks like an old-time movie.

Publish

To publish a movie on your computer:
1. Select a file click on Publish Movie.
Click This Computer then click Next.
Type a name for your movie in the File name box.
In the Publish to box, choose where you want to save your movie once it's published, and then click Next.
Choose the settings you want to use to publish your movie, and then click Publish.
If you want to watch your movie after it has been published, select the Play movie when I click Finish check box.
Click Finish.

Windows Movie Maker supports video file formats below:
Asf, avi, dvr0ms, m1v, mp2, mp2v, mpe, mpeg, mpg, mpv2, wm, and wmv