We've been using QuickTime Pro in the classroom to convert AVI files exported from Windows Movie Maker into iPod-compatible MP4 files. Now that class is ending, students won't have access to QuickTime Pro unless they purchase their own copy.
It may be a stroke of good luck that today I heard about the Free iPod Video Converter (Actually I think Shane told me about it a week or two ago). Along with several other video formats, it will convert WMV files exported from Movie Maker into iPod-compatible files. And it's free. So it should save you the step of making an AVI file (because QuickTime Pro cannot read WMV files). And it will save you $30.
I tried it out today and the process is pretty straightforward. You download and install the program, launch it, and tell it what file you want to convert. It has a dialog that allows you to choose the video and audio bitrate using quality sliders. You should probably refer to the settings we've been using in QuickTime and stick as close to those as you can (refer to the Freevlog.org tutorial if you forgot your settings). After choosing the settings, another dialog comes up asking you to set ID3 tags for the converted file: author, genre, copyright, etc. The default options for these may throw you off as they're based on music genres, not videoblog genres. Just type in what you want, or ignore and click through to start the conversion. You get to preview the video as it is converted, and it opens natively with QuickTime or iTunes after conversion.
As a test of the Free iPod Video Converter software, I downloaded and converted Shane's latest Haunted Mansion video from WMV to MP4, and posted it here so you can see for yourself how well the conversion worked. With apologies to Shane ...