I just tried to add a .MOV file to a Windows Live Movie Maker project, and I get the error "The file might be corrupted or in a format that Movie Maker doesn't recognize."  I accessed the supported file types web page, and although I see .MOV files are supported, I don't know if my particular type of file is covered in the Notes section and may be an exception. 

The video was recorded on a WinBook HD Action video camera.  The full file type, as specified by the documented specs, is "MPEG4 AVC/H.264 (MP4), MOV".

I am running Windows 7 Home Premium, and the video plays just fine in Windows Media Player.

What else am I missing?