I just bought a 750 gb external USB drive for $60. This is enough capacity to back up all of my images and video (I have very little video) for the last three years.
Just an example of how cheap this stuff has gotten these days.
I too found that Windows Moviemaker didn't preserve the quality of the video very well. Don't know if there are settings in it that could improve this. So, next up I bought a copy of AVS Video Editor. Actually, I bought the license that allows you to download all of their software for life, it was only like $80 and they have some useful programs. It works pretty well, but again I wasn't very happy with the quality of the output. So, I ponied up $99 for a copy of Adobe Premiere Elements. The quality of the output is very nice, the videos are smooth and no noticeable loss of quality. I hate the interface and have had a helluva time trying to figure out how to use it as the documentation really blows, but what I have been able to do with it came out nice and it has a lot of capabilities. If I ever devoted the time to really learning it I'd probably like it a lot better.
...Some will fall in love with life and drink it from a fountain that is pouring like an avalanche coming down the mountain...
"I enjoy skinny skiing, bullfights on acid..." - Lacy Underalls
The problems we face will not be solved by the minds that created them.
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