Windows Movie Maker 1.1

I'd have to ask why are you converting the file?  divx/xvid provides better compression and features than wmv format does... not to mention it is always free of DRM tags and shell hooks that Microsoft media allows.

You can surely get the same compression/quality with wmv, but you will be using the dixv codec to do so, I would recommend not converting it unless for some reason you have to.

There is a program called called AVIcodec (IIRC) that will tell you framerate, codec, encoding speed, etc.. for any standard video filetype.  that will provide you with information on what WMM encoded it as.

lastly, there are plenty of freeware programs that can encode and compress audio and video clips; perhaps WMM isn't 'state of the art'?

       I'm extremely new to Windows Movie Maker and know little about compressing files and codecs.  Whenever I save a movie with Windows Movie Maker, it automatically saves it in the .wmv format.  These files are much smaller than the original.avi, which is nice, but the picture quality isn't as sharp.  You can make adjustments for video quality with WMM, but even when you select "Highest" quality, it isn't as good as an .avi file.

Thought about updating to version 2?

http://www.microsoft.com/windowsxp/moviemaker/downloads/moviemaker2.asp

      I just upgraded a few minutes ago, and created a few small movies.  Video quality does seem to be slightly better, and the interface of WMM 2.0 is more helpful than in version 1.1.  Thanks for the suggestion.