1) Is there a way to adjust Movie maker so that it can handle all sizes of
clips? I'm working with widescreen formats, but they keep getting squashed
into a square.
You need to decide what is your final movie aspect ratio. Either 4:3 or
16:9. You can't have both. Decide on the majority of the clips. Set it via
Tools->Options->Advanced.
For the different aspect clips you need to adjust them to fit properly in
the output ratio. This requires a custom effect made using my PIP Plus.
http://www.rehanfx.org/pipplus.htm .Let me know if you need assistance.
2) When I save a project as a movie file, does it lose any quality?
Depends on source and output format. For video that is in DV AVI format if
you save it in DV AVi format then very little quality loss occurs. And that
is only because of a bug in Movie maker itself. Similarly for other formats
it may involve some or large quality loss.
3) Is there any way to include multiple audio tracks into one project?
You have to do it in multiple passes.
Here is a method which protects your movie to have any degradation of
multiple passes. First complete all video editing. save the project and save
the movie in maximum quality output you can afford. Bring it back in another
project and apply an audio track. Keep doing (saving, opening in another
project) untill finished. Now Open the first project again and remove the
Music track and drag the final stage movie into the music track. When you
drop the movie in music track its video portion is ignored (we didnt want it
as it had sufferred multiple pass degradation anyway). Save the completed
movie once more.