What format are you converting from? Where did the files come from? Can you re-capture in a different format? The
Read This First post tells you what we need to know in order to help you.
You can try using a 3rd-party program such as SUPER (FREE!!!) to convert your files to DVD compatable MPEG-2. You can look at one of the Movie Factory Project-
Templates to find the settings (resolution, framerate, bitrate, etc) for a DVD compatible MPEG-2 file.
You may have a corrupt video file. A "bad" file will often play-back OK, but cause trouble when you try to convert it, edit it, or make a DVD from it. The more-compressed formats seem more prone to this "sneaky corruption". AVI/DV files from a MiniDV camera (13GB per hour) rarely cause trouble. (Note that not all AVI files are DV. And AVI file can use any type of compression from DV to DivX.)
Movie Factory can convert from many different formats, but there are lots of formats and lots of variations of each format. If you are converting from a highly-compressed format such as DivX or Xvid...
Lots of Ulead users have trouble with DivX/Xvid files. (But, not all DivX files cause trouble...)