Newb question about using videos in Aurora

Use .AVI files.  Aurora will convert anything else into an AVI anyway.  I've noticed that some .WMV's will work while others won't.  The movies shouldn't cause any lag.  I run off of an old Vista laptop with no issues, but if your system does lag, you can always change the frame offset so that the timing will remain correct.

You are correct that AVI is just a container that can contain many different formats within itself.

The best format to use is an "uncompressed" type AVI at the same resolution as your projector.  The files size for uncompressed AVI will be huge.  We're aware of this and are addressing it in the upcoming version (which will have a different native format).  Alternatively, many have reported that WMV files work well for them, but be aware that Aurora is just going to convert it to uncompressed AVI behind the scene anyway so you may as well stick with the uncompressed AVI. 

You should avoid MOV and MPG (MPEG1/MPEG2) encoded formats since Aurora has known issues with those on Vista and beyond.  Microsoft Video 1 is an ancient very lossy codec and should be avoided.  I can't say one way or the other regarding MP4 or H264.

The only other catch to watch out for is that filter plugins for some older versions of Windows Movie Maker (.ax files) can interfere with Aurora's video playback.  It is rare, but a few have been known to misbehave and wind up inserted into Aurora's filter graph and refuse to go away.  If you use an older WMM for editing then you might want to consider keeping your show PC separate from your video edit PC.

Michael