*clears throat*
WMV is far from edit friendly, infact, you can't edit it, period. Microsoft has specifically designed the codec so that you're unable to edit it. This allows people to distribute copyrighted media without the worry of it being cut and edited into other videos illegally. AVI is a decent format but MOV is the industry standard for digital producers which is why when you open a raw DV file it'll most likely open in Quicktime.

Any decent video editing package will edit .mov files. If you're on Mac look at Apple Final Cut or for PC Adobe Premiere.

Otherwise, upgrade to Quicktime's professional package which gives you the option to export .mov files into loadsa different formats.

Ahh, I'm a mac boy, I dunno much about what's available in terms of video editing for PeeCees.
If it's any help my mate hooks his DV camera up to his PC laptop and captures everything through Windows Movie*ahem*shit*ahem*Maker which saves the footage in avi. format. I think there's something called Dazzle too that does a similar job.
If it was me, I wouldn't have the footage in any other format than .mov, but I hear Quicktime player is shit on Windows just as Windows Media Player is absolutely wank on Mac. Fuck you Microsoft.

Fuck you Dunk