A great camcorder (cue MartinImber

) is the Sony TRV33 that can be bought for around £550
Video can be transfered to a PC via firewire and stills via Memory Stick or USB.
To get video onto the PC you will need a firewire port. This may (but not normally) be on the MoBo or can be added as a PCI card for around £20. If buying a firewire card you will get the DV cable (6 pin to 4 pin) included or if not can be bought for around £5.
If the PC has Windows XP then that include MS Movie Maker. Download the free upgrade to MM2 and that is all the software you will need. If other version of Windows then you can get basic software bundled with a PCI firewire card.
Mark.