one of the most computer-resource intensive things "normal" people can do with a computer. This was true when it was standard definition video and even more so dealing with high definition video. While there have been CPU and other various improvements to computer hardware and operating systems, video continues to be a system hog. There are a couple of things that happen on a computer in the editing and rendering process. The high definition video is brought into the video editor, transcoded and decompressed. Editing happens and the resulting file should be exported/rendered.
We don't know what you are rendering to.
Once the rendering is done, take that file to a DVD authoring application.
1) If the rendered file is high definition (WMV, AVI, MP4 or whatever), then the video editor does the downsampling to standard def video and the DVD authoring application needs to only to do the VOB transcoding.
2) If the final video project in the video editor is rendered to a standard definition format, then the DVD authoring app needs only to do the VOB transcoding.
3) If MovieMaker is using a DVD rendering application as a built-in item, then the video editor is being used as a hybrid and cannot expect to do either very well...
All three methods are extremely computationally challenging. The video files take a lot of space, too.
Why ramble about all this? There are a few things going on in a computer when there is not enough RAM to cover everything. The 40+ minutes of game play you captured - assuming capture at highest quality, will be upwards of 30 gig. You can't fit 30 gig of work into 2, or 8 gig of RAM. In order to do the work, the computer reads a chunk to be done from the hard drive, does the work, then writes the result to the hard drive. When there is not enough RAM, the chunks of work can be smaller - the operating system creates virtual memory.
Virtual memory is free space on a hard drive (the start-up drive) that gets designated as RAM. That means that all the reading/writing in and out of physical RAM extends to also reading/writing in and out of the hard drive. Typically, a hard drive with spinning platters installed in an affordable laptop spins at 5400 rpm. A "regular" desktop hard drive spins at 7200 RPM. A "multimedia" hard drive spins at 10,000 rpm.
When you get a new computer with a new hard drive, all the operating system files are in one place, all the application files are in one place and the contents of the hard drive are contiguous - and the free space is contiguous, too. When this is the case, the virtual memory is all in one place. Over time, the space becomes fragmented. That means document "X" is now stored in a bunch of different places on the hard drive and the available space becomes fragmented, too (and remember, free space on the hard drive is used as virtual memory - RAM).
If the start-up drive has less than about 20% available free space, the computer is courting disaster - especially when combined with fragmentation of video files and virtual memory all running on a (slow) laptop drive.
While all this stuff is going on with the application pulling in chunks of work and spitting out the result to the (slow) laptop internal hard drive, the computer is still running the operating system and some other background applications. Perhaps even connected to a network and running anti-malware... Keep all the above in the background... and lets move to your questions.
1) Yes, MovieMaker should be able to deal with what you want to do - but we don't know a lot about the computer, virtual memory, other apps running, available space, etc. I would caution anyone wanting to do high definition video work on a laptop not designed to do that. Sort of like expecting unrefined oil as fuel in a gas powered car to do the work of 91 octane gasoline...
2) 8 gig physical RAM is the minimum amount of RAM needed for high definition video editing and depends on how much contiguous hard drive space is available for virtual memory. I strongly suggest use of an external drive for the video file project files. This way, the video files are stored away from the start-up drive and the internal drive does not need to be totally responsible for all that video editing overhead. The video editor pulls in video data from the external drive, does what it needs to do, writes that out to the external drive... A multimedia drive is not necessary - but a 7200 RPM external 3.5 inch drive connected via USB3 is strongly recommended.
3) Sony Vegas is much better than Windows MovieMaker... but the analogy is comparing a Chevy Impala to a Cadillac XTS... but if either is trying to run on the unrefined oil, then it really dos not matter which vehicle (or video editor) is used.