MaxxuM - Sure, you're quite right about that.... Of course having a lot of adjustable parameters, controls, filters, scriptables, so on, will give far better results - the comparison is almost like comparing JPEG "camera's auto-choice conversion from internal RAW" - with processing an actual saved RAW data file.
Particularly when you want to demux the audio - process the audio, maybe add an underlay of background music to the ambient sounds, and remux the combo to the video...
Or use denoise, colour, contrast, saturation, brightness, so on, filters on the video. Or convert the 16:9 H264/MOV from your Canon-etc - to "letterboxed" with black borders - so you can make fully-compliant "Standard" DVDs to play on PAL (or NTSC) 4:3 AR TVs - not everyone has big Widescreen TVs, yet...
Or you might need to convert your camera video into a version that suits your video-editor. Sure - you can throw 1920 x 1080 H264/MOV into Kdenlive video-editor in Linux (Sony Vegas equiv, just doesn't cost the AUD$600.00+ Windows friends paid fot it here in Sydney) - and it will output/render it to many other formats (including Matroska) - as well as make a Std compliant DVD-fileset - PAL or NTSC - of it...
You can't do that with all video-editors - in Windows or Linux... The Mac folk have an advantage with H264/MOV - it for some strange reason uses Apple's proprietary MOV container - and Macs have the equipment to digest Quicktime very well.
But - Kdenlive, Cinelerra, Vegas Pro, Premiere Pro, etc - the user does have to know how to use them - and they might not at first have the time to do so when they get a new camera.
Kids are pretty good with computers - but the younger ones might have problems with the more "full-on" programs. They might not be wanting to create "hours-long movies" - just convert their camera clips to shareable versions. Or to YouTube compatible for sharing.
Some very low-cost cameras now do lower-level HD video - the Canon A1200 my teenage godson uses as a "pocket everywhere" device (also has a Fuji bridge-zoom I gave him the previous Christmas) - does 1280 x 720 H264/MOV - and cost a whole $95.00! (It also has a viewfinder and runs on AAs, he uses Eneloops.)
He converts his clips for sharing with Windows Avidemux, on his own PC - and to do videos, uses Vegas on the Family PC.
But there's certainly a place for a point'n'click converter - particularly one newer users or kids can do quick conversions to MPEG4 or Xvid - or for YouTube and iPod / Playstation, so on. They can do that with a Copy of the original clip - and do some better, that takes more time, later.
You commented, "....There were plenty of free programs but they all sucked for Windows..." - and I'm sure you're indeed right about most of them.... Not "all" of the 13,000+ Programs, Tools, Utilities, etc, in our Distro's Linux Repository, to just click-in and try, are "ideal", either.....! 
However - Windows (and Macs, of course) - runs Avidemux.... If your version of Windows can run the QT4 version, it's rather better than the GTK2 version. You can convert most video formats** to most others with it. Including your PC-recorded HD-TV MPEG2-TS files. Resizing and filtering, adding black borders, denoising, slow-motion, reversing, appending (joining) clips, so on, is all there. It can demux and remux , remove, add, etc, audio.
The youngies here download music videos from those 'share' sites - and use Avidemux to "save-out" the AC3, AAC, etc audio-tracks - then convert those to MP3 for their mobile devices.... I don't know how "legal" that is - folk should check for their region's rules before trying that...
However - there is at least one "good" free video program for Windows - and Mac, Linux - Avidemux. It's a lot better and far more functional than it looks at first glance.
And if folk "do" want an "auto-converter" to do their clips for portable devices - Avidemux has that too - drop-down the 'Auto' Menu - and it has several resolutions and ARs for both iPod and Playstation...
** Yes, mate - I "do know" - but most folk these days do say "formats"... 
Regards, Dave.