This is a wonderful software Microsoft developed orginally as a part of their Plus! pack for Windows XP. Microsoft included it with Windows XP Media Center Edition 2005 released last year and as a free download for valid Windows XP users.
Download it here
More about Photostory 3
Create slideshows using your digital photos. With a single click, you can touch-up, crop, or rotate pictures. It’s that easy!
Add stunning special effects, soundtracks, and your own voice narration to your photo stories. Then, personalize them with titles and captions.
Small file sizes make it easy to send your photo stories in an e-mail. Watch them on your TV, a computer, or a Windows Mobile–based portable device.