As shoehorn has already pointed out you will need to transfer your video via firewire to get the full quality. USB, either 1.1 or even 2.0, is not up to full quality video transfer.
If you have a fairly new PC then there is a fair chance that you will already have a firewire port on the MoBo. If not then you can add a PCI firewire card that should cost around £10 from an online retailer and will also include the cable to connect the camcorder to the card.
If running Windows XP then you will also have the software required to do the capture and editing. Movie Maker is part of XP and once you have the free upgrade to MM2 (part of SP2 now) then you have everything to get started. The only other software required is DVD authoring software if you will be recording the video on a DVD burner as this can't be done in MM2.
If not running XP then there are loads of good programs for around £50 or under from the likes of Pinnacle, Ulead etc. Many of these packages also include basic DVD authoring tools. You can download free trial versions of them from the relevant web sites.
Other than that all you will need is plenty of disk space as full quality video takes 1Gb of space for every 4 minutes captured

, thats a massive 13Gb per hour! You will then need more space for the editing and any file conversion etc so you should have around double the space available that you need for the capture.
Good luck and let us know how you get on.
Mark.