If you're just using still images you're not really making a movie, you're making a slide show which is probably best with transitions between each still image and of course a nice music track added. I'm kind of partial to the linear wipes with a soft edge for transitions between photos. I think the 45 degree angle starting from the upper left hand corner is cool. If you have a bunch of similar images, keep them together using the same transitions between each, then maybe have a different transition once the images change dramatically, like the clock wipe or barn door which signals more of a change.

To avoid introducing distortion keep the aspect ratio the same on all the source images which should be the same size. I find it easier to do croping, level adjustments, etc., using some application like Photoshop or another graphic application before going to Video Factory. Then once done with that step just drop them all on the timeline in Video Factory.

Try clicking on the advanced tab and selecting "best" under the custom button to improve output quality. If you plan on making a file playable off a CD then either use the make movie wizard or if you want to save to your hard drive for burning to a CD later use a MPEG-1 template: Video CD NTSC. My favorite so far. :-)

Of course you can combine video with stills. Like if you are on a fishing trip, have a minute or so of you fishing, then have a transation to a still image or two of that big catch you made.