You have to keep the saved video from your camcorder because when you edit it merely provides links back to this file. Since this is non-destructive editing it doesn’t alter the original saved file so whatever you do in the editing process it won’t directly affect the file. Have a look at this click here I found it most useful when I first started editng.
Make sure you save your edited movie by clicking Save To My Computer in the Movie Tasks pane. Am not sure if there are any other ways of saving but I have not had any difficulties using this method.
I should add I have stuck with MovieMaker 2 as I find it more than adequate for my needs & it’s easy to use
Firewire connection can be made without turning anything off exactly as if it were a USB port.
Best of luck with your editing.