I certainly appreciate that you've gone out of your way to help me!
My brain is reeling because I've just spent the last 6 hours experimenting via trial-and-error with everything I can.
Note: I wrote to Fraps support in addition to support here. They told me about using the Windows Media Profile Editor and gave me their recommended settings to convert their .avi files for use in MS Movie Maker. That didn't work for me either!
I downloaded the Windows Media Profile Editor program and used it. It doesn't work properly for me. After creating a new profile with the proper parameters (I believe they are proper?) for converting the 'save wmv file,' to be viewed by WMP, the resultant image is "squeezed" horizontally. It is not proportional to the original avi file. At least, it's not pixelated! That's one "plus" for it. I will write to him again and explain this issue.
There is so much more that I could tell you about the BS I've encountered with every other program I installed, poor documentation, etc. that I won't take the time to present it here. I have tried 3 other programs that claim to "Convert .avi to .wmv" files! All crap!! And, they are so technically-convoluted, that I'd have to spend 2 years studying in order to understand the documentation! Typical of most programs and programmers today. They are programmed by people who have no concept that NEW INEXPERIENCED USERS will be using the program for a specifically (advertised) purpose, and those NEW USERS don't know how to write custom "scripts," recompile code, choose 1 specific codec from among 10,000,000 different codecs, etc. Brilliant programmers often don't have the common sense to even think rationally, let alone... create a user-friendly Windows Interface and/or write intelligible documentation!!!
I just now logged on and found your reply, but there is something you wrote for me to do, but I can't find the value that you told me to use.
You wrote:
> "Encoder Options button : W. M. V. 9, 8192, W. M. A. 9.2, 256kbps 44kHz stereo CBR"
I meant : press the button marked "Encoder Options" on the bottom line, and with the 4 lines of choices there, select those that match my abbreviated.... 
W. M. V. 9,
8192,
W. M. A. 9.2,
256kbps 44kHz stereo CBR"
Reference the value "8192"
It doesn't exist anywhere in my Output Encoder Options (for wmv)!
I'm really frustrated that whoever wrote Prism didn't program it in such a way that "it" could:
-- recognize my screen resolution (1920x1080) -- That's widescreen.
-- analyze the .avi file I captured with Fraps (which displays perfectly with WMP and VLC) and use the data contained therein to generate an appropriate .wmv conversion.
-- and, offer me choices as to the (proportional) final output display sizes, some smaller, some intermediate, some larger, or any other size that still retains correct proportions, and no pixelation or out-of-sync audio/video.
So far, Prism hasn't worked yet, even though I've tried almost everything.
I'm extremely frustrated with NCH programmers for not including a commonly-used Windows feature --- "Reset to Default Parameters" (per dialog/page being viewed and/or for "All" Prism Settings)! It's absurd to have to uninstall and reinstall the program to get them back again, especially because of the rediculous NCH codes and ID's that are required!
I'm venting. Please accept my apology. I'm so frustrated in not finding a brilliant programmer who can also think. Add to that last comment, a decent NCH Technical Writer who can interpret "programmese" into plain understandable english! Where are the "EXAMPLE SETTINGS" in Prism that shows us new users how to configure settings to use Prism to convert one source file (like .avi) to work properly with Microsoft Windows Media Player and/or Microsoft Movie Maker ("Import .wmv into Collections")?
It shouldn't be this damned difficult for me to use Prism to do what I expected it to do, without taking up my time (and, your time!) on this non-visited forum by NCH staff!!
I haven't given up. I hope you haven't either. Prism should work for me, since it seems to work for the rest of you. I just don't know what else to do. Converting an .avi file to a proportionately correct, non-pixelated .wmv file without my having to obtain a PHD in Computer Science is what I expected from NCH's Prism. Hell... I can't even find decent NCH documentation that shows example set-ups for its tested parameters and the parameters that Windows needs to use the converted files properly.
Thank you so very much for bearing with me! I need your help. It looks like you are the only informed, kind soul who visits this forum!
Sincerely,
Larry
(Kreelor)