You're not going to want to reencode WMV to MPEG-2 or it will affect the video quality. Ideally you would start from MPEG-2 material like from a DVD and edit the MEG-2 directly using something like Nero or Sonic's MyDVD to produce an MPEG-2 movie. Movie Maker only saves in .WMV, not in MPEG-2.
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