I strongly urge against simply downloading Windows Live programs without first considering what each does. In my experience, for example, Windows Live Mail insinuates itself into Outlook, rendering it much more difficult to use. I have no idea what WLMM might do to other programs on your computer, but freeware user beware.
I havn't noticed any other programs changing after installing WLMM. I'm just glad that it has the photo to video piece. I used MS PhotoStory but they stopped working on it. They basically took WMM added PhotoStory and changed the UI. Either way I'm happy.
I've been editing movies for decades, starting on a flatbed with a razor blade and building my own NLE system with a massive 4 gig scsi drive in the early nineties. The capabilities that pure amateurs have access to now are simply stunning. Windows Live Movie Maker and the earlier Movie Maker are quite capable programs--pretty much all one needs for home video. Frankly, I think too many people buy (or acquire) professional and semi-professional products when they have no need and little clue how to use them.
The biggest problem with Movie Maker is not its editing capabilities, but with it's inflexible encoder. According to this article it can only do WMV, and I know the old Movie Maker could also do DV, but the lack of fine-tuned bitrate and pixel aspect ratio settings makes it painful to use sometimes. It is certainly no good for widescreen youtube videos, as the video is always converted to anamorphic widescreen with non-square pixels, whereas youtube can only deal with square pixels.
I found the new Windows Movie Maker for Windows 7 very disappointing. I work with HD and thought it would be a snap. But Movie Maker gives you but one option: download the entire HD 1 hour long tape. I'm not gonna do that. So on HD capture it fails. Then I checked out the effects and you can count them all on your fingers! What happened? Way back in XP days I saw dozens of cool effects now there's only 7 or something.
While I'm happy it can deal with HD it's disappointing the limited capture capability.