For anyone waiting on this camera, here are a few tips that I have discovered that might make your life a little easier. After messing around, I found that the following was what worked best as far as firmware updating, conversion, and editing.
As posted before,
http://www.rcgroups.com/forums/showthread.php?t=1556994 is the place to go for all of the information on this camera. It is a lot to read so if you want the summary of what I found to work for me, here it is:
1) Update the firmware following the instructions at the above link. There are two firmware versions you can choose - pick the MOV firmware instead of the AVI (the avi firmware doesn't allow you to edit the file)
2) Download the User Interface here:
http://www.mytempfiles.info/nr16/index.html (the file you want is the first one, Nr16Setup.zip. This allows you to easily change the cameras settings if you want to (you don't need to do this, just if you want to tweak camera settings)
3) Download this free software that will convert your MOV files that you record, into AVI files that are editable.
http://sourceforge.net/projects/mp4cam2avi/
4) Once you record a video, convert it from MOV to AVI you can then edit that video easily. Apparently they are working on a firmware update that will allow us to just record in AVI and then edit it without having to do the conversion step but for now, recording in MOV and then converting to AVI seems to be the best way to go.
Hope that saves some of you a bit of time on the learning curve!