Hardware: You PC need Firewire port (also called IEEE 1394 port or I-Link (only Sony) use it, then you can link DV to PC to get data into PC. If your PC has no Firewire port, you can get a Firewire card around £20 You need a relative large hard disk, over 10GB for one hour video in AVI format. You need a DVD writer to burn final stuff to DVD, you can get a decent one for £50.
Software: You need a package to do video capture, editing and final produce DVD files. There are may packages, Ulead Videostudio 8 (£40) is a very good low cost package and very easy to use.