I use Dazzle Digital Video Creator which has the program Movie Star 5. Drag and drop the clips, then render and create a VCD.
It also comes with a usb hardware interface to get VHS or S-VHS into or out of the computer.
It will do .mpegs and .Avi files, but not .Wmv clips. If anyone knows of a free download to convert a .wmv to .mpg or .avi, let me know.