Please, help me to avoid getting into a flame war with a few other forum members by doing a search on here for DVD camcorder opinions before spending your hard earned.
As for adding firewire & editing software to a PC, well this can be very cheap. If runninf XP you already have the software with Movie Maker 2. Very good, but wont burn a VCD/DVD disc. Full help with the software can be found
Here.
Adding a firewire card (including the cable for connecting up the camcorder) should only cost £10-£20 online and is very easy to fit.
A DVD burner will only cost around £30-£40 and DVD authoring software about the same again.
So for well under £100 you will have a fair upgrade to the PC and have the best options for creating better DVD's that those created directly on a camcorder - ie chapters, and menus that the cam wont create.
Good luck and let us know if you have any more questions.
Mark.