This post may be better on the Vista forum...
With future-proofing in mind, I think the HD camcorder would be the way to go.
With regard to your problem:
Is the software compatible with Vista? You say you blew the dust off so one can only assume it's perhaps getting on a bit and maybe low-tech by modern standards.
You could try this:
Remove any software you have installed relative to the camcorder the power down. Connect your camcorder in the normal way and switch it on, then power up your computer and see if Windows recognises the new hardware. If it does, follow the prompts to install the software from the disc.
If it doesn't post back.