(1) yes, you need to get a DVD writer, Internal is cheaper, but external one will do if you PC has usb2 port ot IEEE 1394 (firewire) port, I assume that you have this because you capture video, you can get an internal one, put into an external enclose box and use as external, you can get idea click here
(2) I think that you cannot avoid to open PC up and fit something because the hard driver you got (30GB) is too small for any video editing
(3) Movie marker is not good enough produce DVD, you need to get something like Ulead Videostudio click here
(4) as for video quality, you need to capture it as avi file (very big size, one hour will take 10GB) or MPEG2 (720x576) which movie maker is incapable of doing this.
(5) if you do not want to go all of those trouble, get a "Stand-alone" DVD recorder such as
Home Dual Format LVW-5006B DVD £160 click here