Just about any video editing software will let you save frames as stills. Including Adobe Premiere.
.asf is a proprietary Microsft format. Several editing programs are out there that will let you code an .asf. Do a CNET.com search on "video editing software".
Best quality for streaming...that would depend on what your server is configured to handle. If your server has MIME capabilities for .wmv, that's probably the best way to go. You can get the Windows Media Encoder here:
http://www.microsoft.com/windows/win...m7/encoder.asp
HTH