Nero - the popular CD burning software - now includes a video editor in its latest package, NERO 6 Ultra Edition. It retails for $100, but can be found for $50-$70. Keep in mind this buys a large suite of tools, including for CD/DVD burning, DVD authoring, cover making, audio editing & mixing, video editing, DVD/MPEG2 player, and a few others.
From the main menu select NeroVision Express, then Make New Movie. The editor itself seems to operate much like Windows Movie Maker (but this one runs under other version of Windows, not just XP). No overlays, but separate tracks for text and video effects. The menus include about 50 special effects and about two dozen transitions. It also has two audio tracks, the ability to capture video, and will export to MPEG2, MPEG1, DV, and SVCD.
The editor is integrated with the DVD authoring software that is included. And you still get the usual Nero burning capabilities.
According to the specs, it will run under any version of Windows and does not require SP2 of WinXP (this last confirmed).
More info at the Nero home page