Windows audio/video recording advice.

[LuIzA]

Ok, so first things first. I'm a Windows 7 user, wanting to start working with videos. Mostly because I'm a student at TrueFire's Guitar Sherpa online classrooms, but also because I may eventually post something on youtube.

So, I'm trying to optimize the way I capture video. This is my (current) equipment:

Webcam: Microsoft HD-3000

Audio interface: Focusrite Saphire 6 (USB)

Video capture: Windows movie maker

DAW: Cubase 6

Video editing: N/A

Right now, it's pretty straight forward, capture video with movie maker, using a mic into one of the pre's of my my audio interface and that's it. I end up with .wmv's and sound coming only from the left channel.

For starters, I'd actually like to center the audio and make it mono, as it must be fairly annoying for the teachers there.

I'm guessing I could just use the DAW for that, but one slight problem is that Cubase 6 doesn't support .wmv's. So I'd either have to convert that, or work with a different file type altogether. I've tried using Youcam, which records into .avi's, only to find that the file size is WAY too big for class purposes.

And then there's youtube, if it ever becomes the case. I'd want to record my guitar to a backing track. So... how does one do that? Is there any video editing software involved?

I've never worked with video before, so I'm pretty damn clueless. All that said, if I have to purchase any new equipment/software, I'd prefer to keep it below $300.

Thanks in advance.