Hi Tessa;
You are describing the exact situation I encountered when I started working
with DV, that is the programs offered just do not seem to do what you want as
easy as it sould be.
So I too, choose to use Windows Movie Maker.
So yes, you can use WMM to capture, and edit your video.
What I do, is use WMM to capture the video frome the source,(I have VCR, DV,
and a patch to my PVR upstairs) as inputs to my computer.
Once I capture the video via WMM I edit the clips in there, add my
transitions, and save the file.
You will need to decide at what resolution you want to save your captured
video. I use NTSC 720x480 30FPS, as I am usually copying to DVD or SVCD, but
if you are only interested in video to view on your PC, you can choose a
smaller resolution, resulting in a smaller file size.
Once I have the edited product, I use Nero Vision Express, to make the
titles and chapters, and burn the project to DVD or SVCD. This is the step
you will use your DVD Express for.
You might want to have a look at this page, if you have not done so already
http://www.microsoft.com/windowsxp/using/moviemaker/getstarted/downloadvideo.mspx
It's a nice guide to getting started with WMM
Hope that helps;
Jeff