Video effects are special digital effects that are added to a video clip on your computer that could not be added anywhere else. Video effects can be something as large as a green screen where you create an artificial background to stand behind, or it could be something as simple as making a color film look like a black and white film
Launch Windows Movie Maker (if for some reason you uninstalled your copy there is a download link in the Resources). Press "CTRL + i" and use the window that opens to find the video clip you want to create effects within.
Wait for Windows Movie Maker to import your file, and when it does, drag your file down to the timeline at the bottom of the window. Right click your video file and select "Video effects." A window will open listing all the video effects you can add to your clip. When you find one you want to add or test, click on it once and then click the "Add >>" button. If you add the wrong one just click on it in the right side of the window and click the "<< Remove" button. When you've found one you want to use or test, click "OK." It will then add that video effect to your video clip. You can add up to six effects on one video clip.
Finish adding any last effects you want to use with your video clip and click on "File > Save Movie File." In the next screen click on "My Computer" and then the "Next" button.