I have the feeling this is a normal issue…whenever I have used Windows Movie Maker to create/edit anything, the resulting video output is distorted. The setting all appear to be correct, but what usualy happens is the video height is correct, but the width to too wide. The output setting was correctly set as 4:3 ratio…maybe I am missing something.
Are you selecting the proper setting PAL/NTSC? Open one of your files using GSPOT, and post the resulting screen shot information here.