Are there any digital camcorders compatible with Windows Movie Maker?
I’ve been looking at Sanyo, Samsung, Canon, and Sony but none of them have files that are compatible with Windows Movie Maker. Aiptek cameras don’t count because they are crappy cameras. $400 at the most.

For standard definition flash memory or hard disc drive camcorders:
=> Convert the video to a format MovieMaker can use. MPEG StreamClip
http://www.squared5.com/
works fine… there are lots of them out there.
=> Use a computer with a firewire port and get a miniDV tape based camcorder.
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If you are looking at flash memory or hard disc drive camcorders that save to AVCHD/MTS format, MovieMaker can’t deal with that file type… you need to invest in a video editor that can. Like Sony Vegas or Adobe Premiere.
No combination of MovieMaker and XP can deal with HDV format from miniDV tape – and only a few combinations of MovieMaker + Vista…
WMM doesn’t read very many file types. You should invest in some good editing software and not buy your camcorder to work with WMM.
Files associated with Windows Movie Maker
Audio files: .aif, .aifc, .aiff .asf, .au, .mp2, .mp3, .mpa, .snd, .wav, and .wma
Picture files: .bmp, .dib, .emf, .gif, .jfif, .jpe, .jpeg, .jpg, .png, .tif, .tiff, and .wmf
Video files: .asf, .avi, .m1v, .mp2, .mp2v, .mpe, .mpeg, .mpg, .mpv2, .wm, and .wmv
you might have to convert your files using http://www.handbrake.fr/ this is a free video converter.