30 seconds if you havent registered. Because round time limit varies so, you suck.
No, the amount you can record is unlimited. Go to your set-up and turn auto-demo on. Also, change the values of your record time on your configurations.
As for converting from .sdm to .avi, there's no quick converters. What I would do is download the freeware FRAPS, which you can record the games from your demoes (you really don't want to do it in-game, unless you want to show what you are doing with your crosshair.
Also with FRAPS, download the Diamond Demo Player into YOUR SOLDAT FOLDER. This gives you more freedom with your demoes with freecam, speed changes, etc.
I assume with these .avi files, you want to create a movie.
By the way, DON'T USE WINDOWS MOVIE MAKER. Unless you don't feel like buying or stealing better software.
With Sony Vegas 7(or higher) I was able to produce a somewhat ok video as a trailer. Only my second video on Sony Vegas, it is much better than what you can produce with Windows Movie Maker.
The Soldat Trailer Example:
http://www.youtube.com/watch?v=a4H-YRQwd2o