How can I get Windows 7 Movie Maker to recognise input from my Sony DCR TRV18E Handycam?

On page 230 of the user manual, it describes how to transfer movies from the camera to a computer using an i.Link (IEEE 1394) cable. You will need the 4 pin i.Link cable and an IEEE 1394 connector on your computer in order to do this. You cannot use the USB cable to transfer the video from this camcorder -- you can only transfer still images using the USB cable.
You will have to buy this i.Link cable and (if you don't have a IEEE 1394 port on your computer) a IEEE 1394 adapter card for you desktop computer. If your laptop computer doesn't have a IEEE 1394 adapter, then you're pretty much out of luck.
Once you have the i.Link and 1394 issues resolved, then Movie Maker should then recognize the camera.