Sifu,
MM2 creates .MSWMM files when you choose to save your project. These .mswmm
files can be altered and resaved and altered again. When you are DONE
editing the project, you choose the "save movie file", option from the menu,
you can save the movie in several different formats such as .wmv or .avi
depending on what you're planning to do with the movie (burn to DVD or post
on web, etc.) These "finalized" video files (.wmv or .avi) cannot be changed,
unless you create a new project and use them as the starting point for
further editing of that video. FOR EXAMPLE: if you saved the video with
titles, those titles are now a part of the video and cannot be edited (can't
change font, color, size, etc) beyond cutting them out completely...
To answer your question....you only need the .mswmm file on your PC for
editing the project. It's there so you can retrieve the project and edit it.
The output file .wmv or .avi etc. is the file you'd use to view your final
video...it contains all the source videos, audio tracks, titles, special
effects, etc. within that one video file....no other files are needed. I
hope that answers your question. Anyone else, feel free to correct or add to
my answer...