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When you are putting together your digital video film you may want to alter the colors and images to give them a more animated or dream like feel. You can do this through classic video effects like blurring or sepia tone, but instead you may want to create an image that has a dynamic that most people have not seen in narrative use.
Windows Movie Maker offers a limited field of video effects to its users, but its application of watercolor is a great choice. What this does to your Windows Movie Maker is add a smudged overtone to the entire video image that is reminiscent of a painting or stained glass window.
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When you find the clip, or clips, that you want to alter go ahead and right click them. This may work best if they are already in the Windows Movie Maker Timeline or Storyboard. Once you have right clicked them, go ahead and select Video Effects from the available list.
After you have selected Video Effects you will get a two columned menu with the available video effects on the left hand side and those on your clip on the right. Go to the left-hand column and find watercolor, which is at the very bottom of the available video effects directly under threshold. Select watercolor and click the Add button in the center in between the column, which will then bring it over to the right hand side.
Once you have done this, you can just press the OK button at the bottom of the window, and it will be applied to the clip. If you want to get rid of watercolor from the clip you go back to the Video Effects window. Find watercolor in the right hand column and select it. Hit the remove button in the middle, which will bring watercolor from the right hand column back to the left hand one. Then just press OK.
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You may not want to apply this to regular story clips where the audience needs to see details in the frame. Windows Movie Maker does not allow you to alter the intensity of the video effect, and you may see that watercolor is too intense for most situations. Like all choices, aim for subtlety and make sure that it is warranted through your vision.