The video clips that you download from YouTube are often encoded in Flash Video (FLV) format and therefore not compatible with Windows Movie Maker and other video editing software.

Another problem with FLV videos is that they won’t play on most mobile phones so you’ll first have to convert them into 3GP or some other popular format before transferring the clips to the phone.

edit flv videos
FLV Video Editor Pro – Screenshot

The FLV Editor Pro software from Moyea has all the tools you need to edit an FLV clip – it can be used to crop selected portion from a video, for joining multiple FLV clips into one, for extracting still images from FLV videos or for converting FLV into other video formats like 3GP, Quicktime MP4, Windows Media, etc.  FLV Editor can also help you extract MP3 audio from a Flash Video clip.

You can go to this Give Away page and grab a software license for free. Update: The offer has expired but you check the FLV Video Editing Guide for more solutions on editing FLV videos.