Usability Defects in Windows XP Movie Maker

I was watching and analyzing the video of a Usability Lab Test. My goal was to select certain "user comments" and use 'em for a test report. Since we were testing a Hand Held / Wall Mounted Touch Screen Application, we couldn’t use our traditional screen capturing software.
While using Windows XP Movie Maker, i ended up making some errors owing to inappropriate placement of buttons. My task was to Mark-In and Mark-Out certain parts of the Video. The way i go about doing it is to begin by playing the video and as n when i identify a certain comment, i pause, go a few frames back and then Mark-In. Then i start playing it again and then pause and Mark-Out. I usually Mark-In / Out some extra frames and then finally chop off the unwanted frames.
Button Placement:Stop and Pause are placed right adjacent to each other. “Stop" button takes one back to the first frame and the “Pause" button just pauses the movie. Instead of hitting the “Pause” button, I hit the”Stop” button and consequently I had to re-do my task right from the scratch. Since my focus is on the Video and Audio, its difficult for me to keep shifting my attention between the Video and the UI controls and also move the Mouse to hit the right control.

The same thing holds good for the “Next Frame” button and “Last Frame” Button”, and “Previous Frame” and “First Frame” buttons.
“Error Prevention” and “Ease of Error Recovery” weren’t built in to the User Interface.
Now, if you were asked to re-design the controls of windows xp movie maker, how will you go about doing it? Also, how will you set the keyboard short cuts for the same? ; ) Hope Microsoft will fix these Usability defects soon.