My guess is one of three things (since I haven't used Winme2 )is that your missing a codec, an add on, or your thought of having to step up to "ultimate".
Are you taking video clips and burning your own DVDs? Try doing everything through Windows Movie Maker.
Your best bet? Roxio's Disk Creator, or Nero Burning ROM. Both have patches out for their latest versions to work in Vista. I usually recommend Roxio for newbies, though I started there, and went to Nero because it has some more powerful tools in creation of bootable media, etc.
M$s OS "freebies" have almost always been "letdowns". They do what they're supposed too, but just barely! Why M$ can't just give us an OS, then sell ad on packs is a mystery to me... OH! if they did that, they probably wouldn't be a monopolist!