I’m unhappy with the video quality produced by Windows Movie Maker 2012.  Two problems:

First, the MP4/H.264 files encoded by Movie Maker use the Baseline Profile with only 1 reference frame and the quality seems to max out at around 12 Mbps with no improvement at higher bitrates.  My source file is 1280x720, 29.97 FPS at 43.6 Mbps and has no noticeable blocking artifacts at all.  Encodings produced by movie maker even at higher bitrates greater than 50 Mbps have severe compression artifacts that shouldn’t be present at such high bitrates.  For this reason, I wish there was an option to encode AVI files using a lossless codec like HuffyYUV or Lagarith, then I could use HandBrake to encode the final MP4/H.264 files with my own preferred encoder settings for optimal results.

Second, the videos produced have moments of choppiness.  In the preview window the video is smooth the entire time, but on playback there are several moments in a 3 minute video where the video becomes choppy for a few seconds.  I was able to resolve some of these moments by splitting the 3 minute video into several segments at points before the problem occurs, but I still feel this might be another problem with the encoder.

Overall, I’m really impressed with the design and features of Windows Movie Maker 2012 and I’m happy that MP4/H264 is supported as the default encoding format, but I’m really disappointed with the H264 encoder quality.  I know Microsoft can do better.