I don't know if anyone is paying attention to this thread anymore, but in case someone stumbles across this searching for a solution to the above problem I hope this helps. I know it would have saved me a lot of frustration.
I had the same problem as mark did on our lab computers. Movie Maker was missing all but two Transitions and Effects for any user who was NOT in the local Administrator group.
I tracked down the cause of the problem to a group policy setting we had set for all of our lab computers that removed the Security Tab. (The policy in place is outlined in Microsoft's KB303153).
We had configured the policy to deny access to the CLASSES_ROOT\CLSID\{1F2E5C40-9550-11CE-99D2-00AA006E086C} key for all "Domain Users".
Not having access to the CLASSES_ROOT\CLSID\{1F2E5C40-9550-11CE-99D2-00AA006E086C} key caused the transitions and effects to not appear. Unless the user was an administrator (even though they also were denied access to that key). Why this happens, I have no idea.
To fix the problem I reconfigured the policy so that the security on the CLASSES_ROOT\CLSID\{1F2E5C40-9550-11CE-99D2-00AA006E086C} key matched what it normally is on a fresh XP install (Admin RW, Users R, etc.) You can't just remove the policy setting you have to reconfigure it (otherwise the deny permission will remain tattooed.)
I don't know why denied permissions to that key mess up Movie Maker like that. But I have confirmed (at least for me) that making that one change is what caused/fixed the issue.
Furthermore I don't even know why we had this policy in place. It's functionality is pretty much duplicated by the User policy in "Windows Components/Windows Explorer/Remove Security tab". I can only imagine it is left over from back when we had 2000 computers still in the domain. All the more reason to go through and clean up AD this summer.
