If you want to keep IE7, just move the "Windows Movie Maker has encountered a
problem and needs to close. We are sorry for the inconvenience." error
message window to the bottom of the screen so only the top of the title bar
shows; as long as you don't click any of that window's buttons, Windows Movie
Maker will work fine, or at least it does for me. When you're through with
Movie Maker, click "Send Error Report" (if you enjoy having MS ignore it) or
"Don't Send" to get rid of the error screen. I came here hoping for an
answer as to how to get WMM to work without that window popping up (and
without uninstalling other things), but it appears no one has seen fit to
resolve that issue.