Premiere 2.0 with Cineform added to it does a good job
also check your settings on the camera
you can change it from 16:9 to 4:3
but lots of good programs out there that will do better then moviemaker when you working with the FX1. YOu bought a HD cam.. get software that can better handle HD content
Vegas sounds good.. never used it so can't say. But have heard other s say it's good