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Splitting clips in Windows Movie Maker really should only be done when necessary. It is much easier to work with a larger clip in a Windows Movie Maker project as long as you can. This will end up leaving your Timeline cleaner and less cluttered, as well as help maintain continuity. There are often times when you will want to split clips in your Windows Movie Maker project and these are usually because of specific reasons.
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The main reason to split a clip is that it is an easy way to trim a clip. When you split a clip you put the play marker at a certain point in the clip and then select split clip to turn it into two at the line. Then you can either delete the first or second part, depending on what you wanted to get rid of.
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If you are planning on using the entire contents of a video clip in a linear order you may still find it useful to split the clip, though you should be very sure before you perform this action. The main reason for this in your Windows Movie Maker project would be to alter one part of the clip while keeping the other clip clean or with different alterations. This is especially true if you are changing audio levels, audio balance between primary audio and secondary audio tracks, or a video effect. You may want to only use video effects on a split clip if you are splitting the clip along a perspective shift in the video clip.
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You may even want to split clips earlier before they are in the Timeline or Storyboard of your Windows Movie Maker project. This should only be done on specific beat points, such as in between answers to interview questions in documentary A-roll. Be careful here and make sure that you are able to return to the original clips. If you are going to do this you have to make sure that you make media management a high priority and it is important to rename each video clip so that you know exactly what is what.