Windows Live Movie Maker now includes several new and impressive transitions and visual effects that are easily accessible from the new Office 2007 like ribbon toolbar. You can even pin these to the title bar of the program for quick access.
Microsoft discontinued Photostory with Windows Vista but the same Ken Burns effect can now be replicated in Movie Maker using the new Pan & Zoom effects (see video tutorials).
Movie Maker can render videos in full High Definition (1080p) format and you also have the option to upload movies directly to YouTube just like in Google’s Picasa software.
The only disappointing part is that Live Movie Maker won’t probably work with your Windows XP system.
Related: The Best Software for Windows (Free tools only)
Update: In addition to Live Movie Maker, Microsoft has also released minor updates for Windows Live Writer and Windows Live Photo Gallery.
Windows Live Movie Maker – Video Overview