As I recall, you can place a start point for a cut anywhere, but the ending point must be a key frame?
It is really weird. I have seen cases where there were 10 key frames in 5 seconds, and then as WHS says, you might have to wait a while for a stop point.
Is there a decent free basic editor that works on WMV and MPEG (non-AVI in general) that does NOT re-encode? I like that feature in Virtual Dub, but other than that I don't much like it.