Thanks guys. When I watch the film its fine from start to finish as long as I dont stop or rewind a bit.(other than having no engine sounds) When I capture a clip and then watch the video again looking for more footage to capture or even when I rewind a little is when the strange things happen. i get ack clouds that dont go away and i get one gun that looks like its firing but no tracers just flash. I will just go buy a license for fraps then. 
FRAPS is free. No license needed. However, in the "free" edition, your recorded clips will have
www.fraps.com pasted in the corner but that's a small price to pay. Also, you only have 30 seconds of continuous record time per clip.
When using FRAPS:
1) download FRAPS and set your record key (mine is R).
2) Initiate the FRAPS program and just minimize it. Initiate the AH Film Viewer program. You'll notice that there is a yellow number in the top left corner of your film viewer window. This indicates your frames per second (yellow = not recording, red = recording in progress)
3) When you get to the point you want to start recording, press R to start and R again to stop.
4) when you stop, your recorded clip automatically gets saved to your FRAPS folder.
5) When you initiate your Windows Movie Maker program, you'll import the clips saved in your FRAPS folder.
Yeah in film viewer I get that trouble too if I rewind. I normally just manually move the time slider itself back to the point I need it so the film reloads itself.