Vista Tutorial - How can you capture individual thumbnails not full capture ?

I am capturing my video from my Sony HDR-HC5 in HD into windows movie maker
fine, but it captures as 1 thumbnail in dvr-ms format ie full lenght of
capture and therefore I cannot edit as normal one would do .
My problem seems to be at the "import the entire video to my computer "
capture screen. It has a dot/untick button which is inoperative so then you
capture the whole video ie in this case 25 minutes and therefore cannot trim
or get rid of the unwanted bits along the way . I am not that good a film
taker !!!
Can this be got around ?
Would converting dvr-ms to avi assist - if so how do you do it ?
Very frustrating as it seems a good basic program for a quick flick
otherwise .
Help !!

Roger