Windows movie maker is free and OK for basic edits. You need to download the proper version as it has a few more features than the default than comes packaged with windows. It won’t edit a lot of formats so you often need to convert the file first.
Not if IIRC. There are plenty of freeware video converters around though to get your files into .wmv or. avi – just need to make sure the settings are what you want. The one I’ve used most recently was called Any Video Converter and seemed to work OK.