Though Windows Movie Maker from Microsoft remains the popular choice, CNET recommends open-source video editor Jahshaka for creating videos on a budget - if you take the time to learn the program and actually read some of those tutorials, you’ll quickly discover that Jahshaka is a very serious editing application with a learning curve that will keep you occupied for a while. Wide file-format support, node-based effects, and editing in DV, SD, HD, and film are only a few of the bonus features.
For capturing videos out of your camcorder or digital camera, you can consider the excellent VirtualDub.
My personal favorites include Adobe Premiere Pro CS3, Camtasia Studio 5 and Photoshop CS3 Extended that has an inbuilt video editor for frame animation.
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