I only do basic video editing with WMM, but here's a list of software we usually recommend for ease of use and a good range of features.
Adobe Premiere Elements 4 - £70 (shop around or check with Adobe for student discounts) - a cut-down version of Premiere, easier to use and allows the students to get more familiar with a professional video editor without the complexity and expense.
Pinnacle Studio 11 - £20 - popular choice, good features and easy to use interface.
Corel VideoStudio 11.5 Plus - £40 - similar to Pinnacle.
Zwei-Stein - freeware - excellent quality for the price. Recommended for beginners.
Sony Vegas Pro 8 - £400 (free demos and trial versions available if required) - similar to the full version of Premiere.