Hey Susan,
I'm using MS MovieMaker for editing my Flip videos and www.MusicBakery.com for music.
MovieMaker should have come with your computer but, if not, it's a free from MS: LINK
MusicBakery sells royalty free music. You buy what you want and then you have license to use it for whatever. Great selection of music and very reasonably priced. There are also free soundtracks that come with MovieMaker.
I just had a class with Amy Chorew who uses the same camera and reccommends the same software/music. But then I consider Amy the top tech expert in our industry so I might be a bit biased. Come to think of it though, one can be biased and right at the same time. :-)
Buddy