Microsoft this afternoon released the new Windows Live Movie Maker, an overhauled version of the movie-editing software that had long been included in the company's Windows operating system. The new application has been optimized for the upcoming Windows 7, but rather than being bundled with the operating system, it's being offered for free download as part of the Windows Live Essentials package.

Among other features, the software offers the ability to publish directly to YouTube, and to import video from Flip and iPhone cameras. An AutoMovie feature promises to help people create videos in less than a minute with transitions, a title, captions and a soundtrack. The software also supports the sharing of movies across televisions, computers and mobile devices.

One bummer for Windows XP holdouts: The new Movie Maker works on Windows Vista and Windows 7, but not earlier versions.

Kip Kniskern of LiveSide.net, who tried the software in advance, gives it a positive review. "Actually if anything it was TOO easy to manipulate – we tried to figure out how to change transitions for a few minutes before realizing it had already changed," he writes. He notes that the software uses an interface similar to the "ribbon" navigation bar in the latest Microsoft Office programs.

More details on Windows Live Movie Maker on the official Windows Live blog.

Microsoft has been coming under increasing pressure to curtail its practice of bundling ancillary applications with its operating system, particularly in Europe,where the company recently proposed a "browser ballot" as a compromise to resolve complaints about its inclusion of Internet Explorer in Windows. The landmark U.S. antitrust case against the company ultimately didn't forbid that practice, but antitrust regulators in Europe -- emboldened by the courts there -- have been taking a harder line.