Windows Movie Maker - can't export video

I've got Windows Movie Maker 5.1 on WinXP Pro SP3.

I am trying to extract the song and dance routines from an .avi file I have which has an xVid encoded movie in it.

Never done any of this before.

I make a new project.
I import the .avi to collections - it is the ony thing there.
I drag it into the timeline.
I play a little to test and find the routine I want.
I cut before the dance routine.
I cut after the dance routine.
I delete the before stuff.
I delete the after stuff.
I save the project.
I make movie.
I get a .wmv file which WMM doesn't play even though I clicked the box 'play movie when I click 'finish''
I play it with media player classic, with VLC media player, with windows media player and more.......
they all play the sound, but no video.

Earlier when I tried just highlighting a section cut off without deleting the stuff before and after, I managed to get a movie out of it (which was much bigger and took much longer to make) and it played video with no sound!

Can anyone help me with this?

There seems nothing to tweak or twiddle. I thought of the 'keyframe' thing but there seems no way to find them.....