Chris,
I've not done that but I'll answer anyway...
I've inported from the camcorder from tape to HDD/DVD recorder via the DV-in (Firewire), I see no reason why it wouldn't also work if shooting "live.
Quality varies between models, but generally these recorders to a good job at encoding these to mpeg2 on the fly with minimal loss.
There are HDD/DVD recorders with DV-in and DV-out - or at least there used to be; Pioneer had a number of models. But I just had a quick look and the current Pioneer models don't even have DV-in, let alone DV-out! You'd best check on the DVD recorder forum to find a current model that does.
But remember all these recorders only store mpeg2 files. So to do what you are proposing would involve:
1. DVD recorder converts DV to mpeg2 (as you shoot)
2. DVD recorder converts this mpeg2 back to DV to be output. Alternately you could edit the mpeg2 from a DVD (this wouldn't require DV-out).
3. You edit this version of the DV... then at the end need to encode back to mpeg2.
The multiple encodings will impact the quality (hard to say how much).
It would be best to stay all DV until the end, then do one encode to mpeg/DVD. So if you need to capture to HDD directly, best to bring that PC. If you have a laptop that would of course be more portable...