With classic versions of Movie Maker, it was a two step process to make a project. First you imported source files... pictures, video clips, and music into collections and then you copied items from the collections to the project storyboard or timeline.
The alternate of a storyboard or timeline view of a project confused many newcomers and the purpose of collections was unclear.
In an attempt to make things easier, the new Windows Live Movie Maker doesn't use collections and the timeline is integrated with the storyboard. The simple choice of opening Windows Live Movie Maker means you're in a project, in a storyboard view with somewhat of a timeline twist. I'll get into that in other articles. This one focuses on the source files you can use in a project.
In XP Movie Maker was the main interface with your mini-DV camcorder. In Vista you had the option of using a capture wizard or Movie Maker. In the Windows Live version of Movie Maker, the interface is handled by other software. There are no features to capture video from a camcorder or audio from a microphone or sound card.
Check what you can use to import camcorder footage by connecting your camera with firewire or a USB cable and seeing what choices pop-up. Pick one. Try each of your options and settle on the one that works best. If one of them is a Windows Live Wizard, it'll tie you into the rest of the Windows Live software.
Once into the computer, you can add an impressive assortment of video clips to your movie project.... including dvr-ms, mpg, mod, vob, 3gp, 3g2, mp4, mpeg, mpv2 and others. I can use the video files on a DVD without copying them from the disc.
It won't accept everything or use them as you expect... such as animated GIF's not being animated. Of course files protected by DRM (digital rights management) won't import.
As you add pictures and video clips, they go directly to the project's storyboard and used in the sequence shown. There are no more collections as in earlier versions of Windows Movie Maker, and the timeline is integrated in a subtle way with the storyboard view of the project.
When we talk about file types, we often mean file extensions... something hidden by default in a newly installed operating system. I guess it's considered visual clutter for most computer users. But in the multimedia areas, talking about a BMP or AVI file implies you can see such extensions. If yours are still hidden, it's easy to 'unhide' them. Here's how to do it in Windows 7.
Open 'Computer' > Organize > Folder and Search Options > View tab > Advanced settings > uncheck the line item 'Hide extensions for known file types'.