To learn all about Windows Movie Maker, try searching on YouTube for "Windows Movie Maker Tutoral". Also, see
http://www.papajohn.org/.
WMV files are perfectly fine for uploading to YouTube. They compress nicely, much smaller than AVI files, and will be accepted and processed by YouTube with no problems.
You will find that you can actually do a fair amount with Movie Maker. If you want to graduate to the more powerful stuff, try Sony Vegas Movie Studio. It is a very robust and feature rich video editor with tons of free tutorials available from Sony, YouTube and many websites. You can buy it on eBay for about $30. I am a professional trainer in Sony Vegas and know that beginners can get up and running very quickly.
Good luck.