Another blinder from Microsoft, no HD. Anyway there is a way to get HD out of it. Go here and on the left of the page expand the WMV folder. Click on the Introduction icon, on that page you'll find some downloadable profiles grab the ones you want. I got the 720p and 1080p ones. Open Program files (x86)\ Movie Maker 2.6\Shared, create a folder in there called profiles and drop the .prx files in there. Restart Movie maker and make sure 16:9 is selected in the options. You should now be able to create HD movies, I just tested it and it works, not sure about the quality though because the only clip I had was one from Fallout 3 in the rain.
Tried that, but youtube still degrades the quality to the point of garbage. I know you can post decent quality stuff on youtube, so not sure why it's being a problem.
Edited by Vagrant0, 19 August 2010 - 05:18 AM.