If you have XP - you should have Windows Moviemaker2. This is fairly basic video-editing but ideal to practice with until you get the hang of it.
A couple of things to bear in mind:- Video work is a resource hog so make sure your PC is up to it or you could be in for a very frustrating time! Also raw video footage is in avi format which results in very large file sizes (fifteen minutes of video could be as large as 4 Gbs!), so make sure you have plenty of space!
If you have XP and want to have a go with Moviemaker post back and I'll dig out some useful links for you.
I've downloaded Moviemaker2 (as I only had Moviemaker1) However the software doesn't detect the camcorder, which is connected using USB. Do I need to purchase another cable and/or another piece of kit? There is some mention of IEEE 1394 cable/port?
then the camera should definetely be detected, strange?? is the camera usb 2.0 and firewire (ieee1394 to use sony's definition). Have you tried another usb item in the same port you are trying to use camera with to verify it's working?
firewire is the better in my opinion, you may find that you can only send information from the camera to the pc and not vice versa. A firewire card is cheap and easy to install. However there are cards out there that do both i.e. usb 2.0 and firewire, you may also find that a front panel would be easier than dipping down behind the pc all the time you want to connect.