An image file may be a jpg, jpe, or jpeg, which is a format designed by the Joint Photographers Expert Group format. It allows superior compression in exchange for a loss of visual quality.

That's because your Paint.net file format is *.pdn. Windows Movie Maker can only import these file types:

.bmp, .dib, .emf, .gif, .jfif, .jpe, .jpeg, .jpg, .png, .tif, .tiff, and .wmf

You need to open files created in Paint.net and "Save As" one of the file name extensions listed above before you can import them into the program.

Yes. Pictures uploaded from external devices can be imported and used in Windows Movie Maker as long as they are formatted with one of the following file name extensions:

.bmp, .dib, .emf, .gif, .jfif, .jpe, .jpeg, .jpg, .png, .tif, .tiff, .wmf

Upload the picture from the flash drive to your computer. Then check the file name extension (format) to ensure it is compatible with Windows Movie Maker:

.bmp, .dib, .emf, .gif, .jfif, .jpe, .jpeg, .jpg, .png, .tif, .tiff, .wmf


Note:
To find the file name extension (format), right-click the file and choose Properties from the drop-down menu. If the extension is not one listed above, you need to open the file in MS Paint (or other picture editing software) and 'Save As' one of those listed above.