I was wrong to say that. Compressing is NOT the same as converting. You can do either compress or convert or both. Just not with moviemaker. And like you said it automatically converts the file to .wmv. I was describing basic because I was refering to windows moviemaker. Sorry if I confused anyone.
I don't know about yours, but my moviemaker also has one option to save the file as a (DV-AVI (NTSC)) format but the file is huge. I think I posted one here that I made that was over 11 MB and only played for three seconds.
There are so many options it's enough to drive you crazy.