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mp4 files, which it says it does support. Where they say: "Doesn't support MKV, MOV, FLV", content for all 3 can often be placed in. While you've got your problem solved james, I wanted to mention that for everyone else since the Power Director giveaway is somewhat limited in what types of video containers it'll work with.
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A utility called Media Info can be handy to tell just what you've got inside of a video file - you can get that, along with tools for changing the type of container file at videohelpcom. SO if a video app doesn't recognize one type of container, it's very often possible to work with the same video in another type of container. The good news is that video & audio streams can each be copied out of the container they're in, & placed in another type of container without re-encoding, either together or individually. One or both of those streams are then placed in a container - using video DVDs as example, both streams, together with any additional audio streams & sub titles, are placed in a VOB container. mpeg2 video in the case of DVDs, usually accompanied by AC3 audio.
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That disclaimer out of the way, video & audio streams are each encoded using one of a variety of formats, e.g. Personally I'm not a huge fan of any Cyberlink software other than PowerDVD, so I don't have lots of experience with Power Director.
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