I found the solution. If you have Internet Explorer 7. REMOVE it . Go back
to version 6 and Movie Maker will work again.
To remove Explorer 7 do the following:
Click Start, Click Run Type appwiz.cpl and then click OK. Scroll thru the
list of installed programs to the windows XP - software updates section.
In the windows XP Software updates section Click internet Explorer 4 Beta 2
Preview and then click remove.
In the software update removal wizard dialog box clik next. Click Finish
when the process has finished, and then restart your computer.
I downloaded IE7 (not the Beta version). I went to programs and then IE7 I
highlighted all the files and deleted them (I had a copy of firefox- so I
could still search te web). When you restart your computer you should have
IE6 and Movie Maker will work.
hope this helps you, it did with me.
Marc