Other than the advice already given by Beejaycee (need to get on the forum earlier in the day to beat him to it

) I suggest that you do all the capture and editing in Movie Maker as AVI files. The WMV files are highly compressed, hence the low quality, and are not compatable with most DVD players. However the AVI files will be around 13Gb per hour of footagfe captured, so you do need loads of disc space.
If you are happy with MM for capture and editing (and it is very good at this) then you can just buy a DVD authoring program such as Ulead DVD Movie Factory to create the final DVD discs. The quality from this (and many others) should be almost as good as the very large AVI files you capture directly from the camcorder.
Mark.