windows movie maker is a crap product. iMovie is far superior. (yes, I’m a Mac user)
I still have no idea why WMM is still considered an ok product, it should go the way of Vista.

To help you out as a PC user, there are two options. Get Avid ($ lots) or download the free trial of Vegas and if you really like the product, it’s only $55usd for the basic package which will sort you out nicely.
http://www.sonycreativesoftware.com/products/vegasfamily.asp
It’ll save all frustrations and is far easier to use than movie maker, you won’t get frame drops or compositing problems.

Also don’t capture the entire tape in one go, it’ll chew up hard drive space like cookie monster. break it into smaller chunks, this will make it easier to capture and edit.
It also means you can run concurrent lines of footage in your editing timeline and pick the best shots.
It also means you can adjust the timing if the sound track you use is slightly out of sync to the visuals.

We have a small film company and this is what I have gleaned from the editors we’ve used. We use a professional product called Final Cut. there is a smaller version, but for domestic use, Vegas will be fine and Final Cut is a Mac product.