Did the usb cable come with your camcorder,also is it thin and flimsy? The problem is, your usb cable is not able to transmit enough information at a certain speed to make the video quality good. If that is the case and you do have the firewire port then i would get the fire wire cable. When i first started i used the tiny little usb cable provided with the camcorder and the video quality was horrible but when i got the firewire it was improved dramatically. But before you go out and buy the firewire burn a dvd and see how good it looks and then you will know if it was your computer compressing the video for playback on your computer. And one last thing windows movie maker is an excellent program for beginners it is what i first used. But after a while you will realize its limitations. Learn all the ins and outs of movie maker before you go and buy a different video edititing program, for example i now use vegas movie studio 7.0 and it is alot more complicated than movie maker, but knowing how things worked from using movie maker it didnt take me that long to get used to vegas movie studio.