Digital 8 was developed to get a into "digital" and still be able to play older hi 8 tapes. I had one which is now too costly to repair .
The Camcorders are nice and well specced at the top end. PQ tends to be Typical Sony: More than acceptable.
When capturing ( hi8 material) to PC there is no timecode although there is analogue to digital conversion "on the fly".
Timecode not originally present cannot be added. Time code is useful for non-linear editing ( NLE) software to identify the variuos parts of your captured footage
Note that not
all digital 8 camcorders are backwards compatible with Hi8 ( Very silly marketing on Sonys part, I think)
If Editing is not a paramount wish I think that recording to a good settop DVD recorder ( as suggested above) has a lot to commend it.
I did a bit of that myself. I note that you do wish to Edit though!
The PC route is certainly much more flexible and versatile but is more hassle and needs More of a hardware and software layout as well as some Know how.
Your hardware seems OK and Software choices abound .
We could make you a shortlist if you wish. For know how " ask and ye shall recieve"
Regarding your hardware, I have some concern about the capture speed of the
external hard drive for video, and the interaction of your edit software program with video clips on an external media. I also think Ram of 1G is desirable.
Since the source is HI8 , PC editing doesnt not really promise better PQ but this method promises less "generational loss"
If you wish to get into the PC route ( I would) , connecting your HI-8 camera to a Mini-DV with analogue in and connecting that via firewire to a PC could enable you do digital capture ( to PC) and also archive the Hi-8 material to Mini DV tape simultaneously.
Even if you cant do this simultaneosly you could do it sequentially.
This is not as complicated as it sounds and may mean you dont need to buy a digital 8 camcorder now and then a Mini Dv later
Good luck