I tried to find a free video editor (windows, right?) a while ago and Wax and Virtual Dub were the only two I found to be worthwhile. Jahshaka was nasty and doesn't work properly (at least, not on Vista or with a LOT of tweaking), and the standard Windows Movie Maker is clunky at best, and importing options are not only limited, but buggy on Vista.
Unfortunately, Avid discontinued their free edition (which was the BEST free video editor, hands down), so your best bet is to pay for innacle (pretty good if I remember rightly) or go for something a bit more expensive like Adobe Premiere which is worthy investment if you're planning on making videos for a substantial period of time.
By the way, a 'bit' more expensive is a euphemism for expensive (the Elements slimmed down version is around $120, but the full version is $800!)