Windows MovieMaker is a pretty good tool, but it only creates WMV. :-/
Well, you could check out this program for conversions: MPEG4 Direct Maker
Though its name suggests that it can only do MPEGs, I've found it can convert nearly anything into anything else (movie-wise, anyway). The price is a bit steep at $50, but the one-month trial does everything the main prgram does. Also, the overall quality of the conversions is excellent, so, IMHO, it is worth the price.
EDIT: Are we ever gonna get this thread back on the purpose of playing some D2?
Now that I think
I've forwarded the ports correctly, I'll actually be able to join in!