If you have the emulator colors coming out in red instead of orange, I have the solution to bypass that.
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First, go to tools.
Then you click on Options.
Then click on the 'Compatibility' tab in options.
Then scroll down until you find something that says: ffdshow Video Decoder.
Then if it isn't checked, place a check by it, and then your recorded emulators will come out with the orange background after you publish the movie instead of the red background.
*PLEASE NOTE*I'm not sure about XP, but this is only confirmed to work in Vista's Movie Maker.
Thanks!!
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-Chris