1) Any video captured via a firewire connection will be in DV format. MPEG-2 is the correct format for copying to DVD.
2) If your editing programme is designed for editing a DV file, then just capture and edit. Some programmes are analogue only, but these are few and far between.
3)

Now I'm lost. Don't remember

But remember a DV file is only the video, the sound is a separate file.
Mark.