Error message when you start the Import Video Wizard in Windows Movie Maker on a Windows Vista-based computer: “Switch your digital video camera to VCR mode to continue”
When you start the Import Video Wizard in Windows Movie Maker, you receive the following error message on a Windows Vista-based computer:
Switch your digital video camera to VCR mode to continue.
Additionally, you do not see the Import live video screen. Therefore, you cannot record live video from a video camera to the hard disk of the computer.
For more information on this issue, including potential causes, workarounds, and resolutions, see: Microsoft KB Article KB930058.

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