I use Movie Maker 2.
ianeff Does your camera have a USB port? Have you tried downloading a still pic and see if this works. If it does at least MM2 recognises the existence of your camera.(check in my computer to see if you have a pic of a video camera displayed) If it does not did you have any software come with your camera which you can at least download a still pic to, just to make sure your camera is not at fault.
Have you tried doing a 'restore' to a time just prior to up dating to MM2. Then you can try MM1
to make sure it is MM2, is the item at fault. Then load it on again. Try MM2 again. Worth a try..Lap..