Welcome to CD Freaks
Unfortunately, Windows Movie maker doesn’t support importing video files from a DVD recording.
If you would like to backup the disc to the PC, you can do this by creating a new folder on the PC (e.g. give it the title of your footage) and copy the content of your DVD’s VIDEO_TS folder into it. To open the DVD instead of playing it, right-click on the DVD drive in “My Computer” and select ‘Open’. You can play this copy folder by going into the folder and opening the first “VIDEO_TS” file.
To edit the footage to make video clips from, you will need to a video encoder capable of handling VOB files. I mainly use AviDeMux (freeware), which can edit and join footage. This tool can make edits without recompression, by selecting “Copy” for the audio and video and “MPEG-PS (A+V)” for the format. For compression, I would suggest trying “MPEG-4 ASP (Xvid4)” for the video, “MP3 (LAME)” for the Audio and AVI for the format.
If you would like to edit the footage to remove bad bits or merge several camcorder DVDs onto a single DVD, you will need a DVD authoring package. It’s worth checking what (if any) software came with your camcorder, as some come with a DVD authoring suite to edit your footage. For my own DVD authoring I mainly use Cyberlink’s Power Producer (Standard edition costs ~$50).