You should ne able to set the Windows Movie Maker to record an AVI at 25M/s for the best quality.
I've been trying different software to capture and create miniDVDs (DVD format on a CDR) I've tried these so far for capture and DVD creation:

DVD Complete by Dazzle
VideoSuite 6 by Ulead
MGI VideoWave 5
Studio version 7 by Pinnacle

They all have free trials, and all have their pros and cons, I still haven't decided which one I want...

Also check out the vcdhelp.com message forum.
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Dave Clark Georgetown, Texas MK2A 42Gb - AnoFace - Smoke Lens - Dead Tuner - Sirius Radio on AUX